Blockchain Technology Set to Revolutionize the Lending Industry

Thanks to blockchain technology, the lending industry could undergo its own technological revolution. The Government National Mortgage Association, or Ginnie Mae, is experimenting with blockchain to determine how best to integrate its technology into the lending industry.

According to GCN, Ginnie Mae’s innovation lab is looking at how blockchain technology can be beneficial to loan-level service transfers, pool issuance, loan servicing, and bond management applications. The lab was started in 2019, and one of its achievements has been the development of the Federal Housing Blockchain Network to collaborate across federal agencies; government entities; mortgage, servicing and investment firms; trade groups, and the entire housing finance ecosystem.

“Information security, data provenance, lineage and legal sufficiency are among Ginnie Mae’s top priorities for considering blockchain,” said Barbara Cooper-Jones, senior vice president of Ginnie Mae’s Office of Enterprise Data and Technology Solutions. “Blockchain may reduce the number of times information is handled, reconciled, verified and stored by each company in the U.S. housing finance ecosystem, thereby reducing cost, risk and data latency.”

Ginnie Mae’s efforts are an example of how various business sectors are utilizing blockchain technology to enhance their own business processes. The move towards more blockchain implementation opens up opportunities for investors to get exposure to companies that are at the forefront of this movement.

2 ETFs to Access Blockchain Exposure

Investors can get blockchain exposure with a pair of exchange traded funds (ETFs) from Invesco. One is the Invesco Alerian Galaxy Blockchain Users and Decentralized Commerce ETF (BLKC), which will aim to track the Alerian Galaxy Global Blockchain Equity, Trusts & ETPs Index.

The index is comprised of stocks of companies that are materially engaged in the development of blockchain technology, cryptocurrency mining, cryptocurrency buying, or enabling technologies, exchange traded products (ETPs), and private investment trusts traded over-the-counter that are linked to cryptocurrencies. The fund comes with a 0.60% expense ratio.

Another option is the Invesco Alerian Galaxy Crypto Economy ETF (SATO). SATO aims to track the Alerian Galaxy Global Cryptocurrency-Focused Blockchain Equity, Trusts & ETPs Index and provide exposure to companies participating in both the cryptocurrency and blockchain space, including businesses such as cryptocurrency miners, cryptocurrency infrastructure technologies, and cryptocurrency buyers.

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