🔀On-chain Feeder
This use case involves an investment vehicle set up under Luxembourg’s securitization regulations, operating as a compartment within a Special Purpose Vehicle (SPV) under the Euro Medium Term Note (EMTN) Programme. The sole purpose of this feeder is to facilitate the collection of capital from investors using digital assets.
Key Features
Stablecoin Capital Collection: The on-chain feeder exclusively collects investments in USDT (Tether) from its investors. This allows the feeder to handle digital asset-based investments while ensuring seamless interaction with the traditional financial system.
Stablecoin to Fiat Conversion: Once the capital is collected, the feeder converts the USDT into fiat currency (USD) and proceeds to invest 100% of the liquidity into another investment vehicle. In this case, the target fund is registered in the Cayman Islands.
Compliance with Regulations: By utilizing the on-chain feeder, the Cayman Islands-based fund manager is able to accept stablecoin investments while maintaining full compliance with its existing regulations. This structure also allows the fund manager to avoid making changes to the fund's governing documents, such as the offering memorandum, which might otherwise be required to accommodate digital assets.
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