Xend Finance users can now invest in tokenized U.S. assets via Risevest — but regulation limits access across Africa

Xend Finance, a decentralized finance platform and cryptocurrency exchange, has partnered with investment platform Risevest to give its users access to U.S.-based real-world assets using stablecoins.

The partnership allows users to invest their stablecoin holdings in tokenized global stocks and other assets through Risevest and earn returns directly onchain.

The details 

• According to reports, both platforms are collaborating to launch a platform where Africans can invest in global assets, but onchain. 
• Users can purchase fractional shares of tokenized assets for as low as $5 and enjoy the transparency of blockchain technology since transactions are carried out on-chain. 
• Investments in these dollar-based assets are made with the USD-pegged stablecoins USDC and USDT. 

Dive deeper 

• Mariblock spoke to Risevest’s Eke Urum and Xend Finance’s Ugo Aronu to better understand the partnership between the two companies. 
• Urum said: 

“We are helping [Xend Finance] get yields for their stablecoin holdings... The partnership we did with [Xend Finance] for now is just to help them get yield for their own crypto users.” 

• Essentially, Risevest will enable Xend Finance to access tokenized dollar-based equities in the US, allowing its users to earn yields and expanding the crypto firm’s product offerings. 
• Xend Finance will incorporate Risevest’s existing application programming interfaces (APIs) customized to cater to the crypto firm’s clientele. 
• Aronu told Mariblock: 

“We are working with Risevest to get a bunch of tokens — just like ETFs — so [users] don't necessarily have to select what token. Everything is managed by Risevest, and then people can invest and get returns. We’re also doing it in real estate as well because Risevest also has a license in America.” 

Regulatory clarity 

• The partnership builds on Risevest’s U.S. broker-dealer license, announced earlier this year, which allows the company to offer African investors access to global markets.
• Regulation-wise, the partnership involves Risevest’s offshore entities registered in the Caribbean and the United States, ensuring that the product meets global legal requirements. 
• To avoid regulatory complications in Africa, stablecoins from Xend Finance are routed through Risevest’s Caribbean entity and settled with its U.S.-facing operations, Urum told Mariblock.
• From here, investments are made in the US-based market options, and yields are earned, the proceeds of which will be ultimately repatriated to Xend Finance as returns on its users’ investments.  

African jurisdictions need better regulations 

• Urum added that while tokenization makes it easier for Africans to access global investment markets, regulatory barriers remain a major challenge.
• According to him, Risevest can bring real-world opportunities onchain and let Africans access global value from wherever they are.  
• However, unfavorable regulations mean most of the firm’s crypto-focused efforts are available in other jurisdictions but closed to Africans. He said: 

“As a company that is registered and licensed in the US, we found that it's becoming easier and more advantageous to focus on our US side with more of our crypto initiatives because that gives you much better access to the rest of the world. I think that African regulators should probably consider being a bit more— it’s risky— open-minded about making crypto something that they accept.” 

Zoom out 

• Risevest is another name on a growing list of traditional financial companies looking to incorporate blockchain technology into their product offerings since the start of the year. 
• In April, Mariblock reported that Nigerian-based fintech Flutterwave joined stablecoin infrastructure firm Circle’s payment network for settling cross-border transactions using stablecoins. 
• Global credit and debit card issuer Mastercard announced a partnership with crypto payments platform Moonpay to allow its users to transact directly with their stablecoin balances. 
• Mariblock also reported in May that the large traditional payments company Stripe expanded its offerings into more than 100 markets by launching a stablecoin-based payments feature. 
• Typically, the forays of these tradFi companies into the decentralized world involve partnerships with established crypto firms.