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The mortgage-backed securities (MBS) market is massive—roughly $11 trillion—yet it’s operating on rails laid decades ago. While financial markets have undergone a digital revolution, MBS trading remains tangled in outdated processes, slow settlements, and high barriers to entry. Deals still rely on complex paperwork, middlemen, and a system designed for legacy institutions rather than modern investors.

But what if that changed?

What if mortgage-backed securities could be traded like stocks—efficiently, transparently, and with real-time settlement? That’s exactly what Asset Token Ventures (ATV) is working to achieve with MBSToken. By leveraging blockchain technology, they aim to modernize this rigid, high-stakes market, bringing speed, security, and accessibility to an asset class that has long been out of reach for most investors.

The idea of tokenizing real-world assets (RWAs) isn’t new, but mortgage-backed securities present a unique challenge—one that requires balancing innovation with regulatory compliance. And that’s where David Robnett, co-founder and managing director of ATV, comes in. With deep experience in mortgage lending and fintech, Robnett is at the helm of a movement that could redefine how fixed-income assets are issued and traded.

In this exclusive interview, Robnett sheds light on how MBSToken works, the potential for blockchain to revolutionize fixed-income securities, and what the future holds for RWAs beyond just mortgage-backed securities.

Why was Asset Token Ventures (ATV) founded? What problem are you solving?

Asset Token Ventures was founded to tackle persistent inefficiencies in the mortgage-backed securities (MBS) market. MBS are essentially financial instruments backed by pools of home loans. Despite representing an $11 trillion market, MBS trading remains stuck in outdated processes that create barriers for many investors.

While most markets have modernized with technology, MBS transactions still involve excessive paperwork, intermediaries, and settlement times that can stretch for days. This creates unnecessary friction, high costs, and limited access for all but the largest institutions.

We saw how blockchain could transform this space. By tokenizing MBS, we're creating digital representations of these assets that can be traded more efficiently, with greater transparency, and lower costs. Our blockchain solution provides a verifiable, immutable record of ownership and transaction history that simply wasn't possible before.

Our mission is to bridge traditional finance with blockchain innovation, making institutional-grade fixed-income assets more accessible while maintaining the security and compliance that sophisticated investors require. 

We're not just tokenizing for technology's sake – we're solving real problems that have plagued this market for decades.

What inspired the creation of MBSToken? Was there a specific gap in the fixed-income or MBS market that led to this solution?

The inspiration for MBSToken came from witnessing the stark contrast between the technological advancement in most financial markets and the persistent inefficiencies in mortgage-backed securities.

What caught our attention was how challenging it remains for qualified investors to access this market. Even sophisticated investors with significant capital often struggle with the high minimums, relationship requirements with major institutions, and cumbersome processes involved in MBS investing.

We saw these issues as a perfect use case for blockchain technology. With MBSToken, investors can gain exposure to institutional-grade MBS with greater efficiency and transparency. Blockchain provides an immutable record of ownership, and smart contracts can automate many processes that traditionally require manual intervention.

Why do mortgage-backed securities (MBS) make sense as one of the first major RWAs to be tokenized?

Mortgage-backed securities are particularly well-suited for tokenization, making them an ideal starting point for bringing real-world assets onto the blockchain.

The sheer size of the MBS market provides the necessary depth and stability for meaningful tokenization. This isn't a niche market where liquidity could suddenly disappear; it's a cornerstone of the global financial system with substantial trading volumes.

What makes MBS especially attractive is standardization and credibility. Many are backed by government agencies like Fannie Mae, Freddie Mac, and Ginnie Mae. This government connection provides an added layer of confidence for investors who might be new to blockchain-based assets but understand the fundamental security of agency-backed securities.

MBS also generate predictable cash flows based on the underlying mortgage payments. This makes them ideal for smart contract implementation, where token holders can receive automated distributions according to predefined parameters. The blockchain can efficiently track these payments and distribute them proportionally to token holders without the manual processing traditional systems require.

Additionally, institutional investors already understand MBS fundamentals, creating a natural bridge between traditional finance and blockchain innovation. They don't need to learn both a new technology and a new asset class simultaneously.

What are the biggest challenges facing RWA tokenization, particularly in mortgage-backed securities?

Let's be candid about the challenges in tokenizing real-world assets like MBS – this is pioneering work that requires navigating significant hurdles.

Regulatory compliance tops the list. Most securities laws were written long before blockchain existed, creating a complex regulatory landscape for tokenized securities. We've addressed this by working with specialized legal counsel and maintaining an open dialogue with regulatory authorities. Our approach isn't to find loopholes but to operate within existing frameworks while demonstrating how blockchain can actually enhance regulatory oversight through improved transparency and auditability.

Custody represents another major challenge. Traditional financial institutions need secure, compliant ways to hold digital assets. While crypto-native investors may be comfortable with self-custody solutions, institutional investors require institutional-grade custody services that meet their strict risk management requirements. The good news is that this infrastructure is developing rapidly, with several regulated providers now offering solutions.

There's also a significant education gap. Many potential investors understand either traditional MBS or blockchain technology, but few understand both deeply. We've invested heavily in educational content and direct engagement to help bridge this knowledge gap.

The technical challenge of connecting blockchain systems with traditional financial infrastructure shouldn't be underestimated. Creating reliable bridges between on-chain assets and off-chain settlement systems requires careful engineering and extensive testing.

Finally, building genuine liquidity takes time. While tokenization can theoretically enhance liquidity, developing deep, active markets for tokenized MBS won't happen overnight. We're taking a patient approach, focusing first on quality and stability rather than rushing to scale.

How does ATV handle regulatory compliance, especially given the complexity of MBS and U.S. securities laws?

For ATV, compliance isn't just a box to check – it's fundamental to our business model and embedded in everything we do. We recognized from day one that bringing MBS to the blockchain would require a sophisticated compliance strategy.

Our approach starts with a simple principle: a tokenized security is still a security. We don't try to argue that putting an asset on a blockchain somehow exempts it from securities laws. Instead, we've structured MBSToken to operate fully within existing regulatory frameworks.

This is why we've created separate investment vehicles – MBSToken I for non-U.S. investors and MBSToken II for U.S. investors. This allows us to address the specific regulatory requirements of different jurisdictions rather than trying to force a one-size-fits-all approach.

Every investor in our platform undergoes comprehensive KYC and AML verification. Our onboarding process is designed to meet or exceed the compliance standards of traditional financial institutions, ensuring we know exactly who's investing and that they meet the accreditation or qualification requirements for our offerings.

Our legal team, led by our General Counsel John Matheson, has deep expertise in both securities law and blockchain technology. We also work with specialized external counsel to ensure we're addressing all regulatory considerations.

Rather than operating in regulatory grey areas or hoping for favourable interpretations, we proactively engage with relevant authorities. Blockchain enhances our compliance capabilities by creating immutable audit trails and programmable compliance through smart contracts.

This compliance-first approach might mean we move more deliberately than some competitors, but it builds lasting trust with both regulators and institutional investors – essential ingredients for long-term success in this market.

Some critics argue that tokenization does not necessarily improve underlying asset quality. How would you respond to concerns about tokenized mortgage-backed securities introducing additional risks?

We know that an MBS on a blockchain doesn't magically transform its fundamental risk characteristics or improve the quality of the underlying mortgages. A BB-rated security doesn't become AA-rated just because it's tokenized.

However, this overlooks how tokenization can enhance risk management and transparency in ways traditional markets simply cannot achieve. When we tokenize an MBS, we're not claiming to change the intrinsic quality of the asset itself. What we're improving is how investors can interact with, analyze, and trade that asset. 

MBSToken provides exposure to the same high-quality, agency-backed securities available in traditional markets, but with additional structural benefits. The blockchain creates an immutable record of transactions and holdings. This reduces information asymmetry – a significant issue in traditional MBS markets – allowing investors to make more decisions based on complete, verifiable information.

We've designed our fund structure with investor protection as a priority. Our MBS holdings are in bankruptcy-remote, stand-alone funds, creating an additional layer of security beyond what's typically available in traditional vehicles. 

Where do you see MBSToken in five years? Will it expand beyond mortgage-backed securities?

In five years, we see MBSToken established as a proven, trusted entry point for institutional capital into tokenized fixed-income assets, with a track record of delivering on the promises of blockchain-enhanced efficiency and transparency.

We expect to see substantial growth in assets under management as more institutional investors recognize the tangible benefits of our approach. The early adopters will likely be forward-thinking family offices and investment funds already comfortable with digital assets, but we anticipate broader adoption from traditional financial institutions as the market matures and regulatory frameworks become more defined.

While MBS will remain a cornerstone of our strategy – it's an enormous market with plenty of room for growth – we certainly won't limit ourselves to just mortgage-backed securities. The same inefficiencies we're addressing in the MBS market exist across fixed-income, creating natural expansion opportunities.

Corporate bonds represent an obvious next step, with similar characteristics to MBS but different risk and return profiles, providing diversification benefits for our investors. Municipal bonds, treasuries, and other structured credit products are also on our roadmap as we expand our tokenization capabilities.

What excites us is how we can leverage blockchain's programmability to create innovative investment structures that aren't possible in traditional markets. Imagine customisable investment parameters, automated portfolio rebalancing, or programmable yield distribution – features that could transform how investors interact with fixed-income assets.

Will ATV tokenize other real-world assets like corporate bonds, real estate, or even private credit?

Absolutely. While we're currently focused on establishing MBSToken as the gold standard for tokenized mortgage-backed securities, our vision extends far beyond just MBS.

Corporate bonds share many characteristics with MBS but offer different risk-return profiles and diversification benefits. The corporate bond market suffers from many of the same inefficiencies we're addressing with MBS – limited accessibility, high transaction costs, and slow settlement processes. Applying our tokenization framework to corporate bonds could deliver similar benefits in terms of enhanced liquidity and transparency.

Real estate is another exciting frontier. We're working with mortgage-backed securities, which are essentially pools of real estate debt, so extending to direct real estate ownership makes sense. Tokenization could enable fractional ownership of institutional-grade properties or portfolios, providing investors with exposure to real estate with potentially better liquidity than traditional REITs or direct ownership.

Private credit is perhaps one of the most compelling opportunities. These investments are traditionally highly illiquid, with limited secondary market opportunities and high barriers to entry. Tokenization could revolutionize how investors access and trade private credit, providing unprecedented transparency and liquidity.

The common thread across all these opportunities is applying blockchain technology to create genuine improvements in market efficiency, transparency, and accessibility. 

However, we won't tokenize for the sake of tokenization. Each expansion will be evaluated based on market demand, regulatory considerations, and our ability to deliver meaningful improvements over traditional alternatives.

 We're building for the long term, not chasing the next trend.