Capitalism in Housing Can End Badly: A Housing Bust Comes for Small-Time Investors --- Thousands of people risk losses in apartment-building purchases.

"Few investors rode the pandemic-era housing boom as high as Jay Gajavelli. Fewer still have fallen as far.

Before Gajavelli found his real-estate career, the 61-year-old immigrant from India was just another information-technology worker, putting in 60-hour weeks for a middling job in Dallas. Last year, Gajavelli's company owned more than $500 million worth of Sunbelt apartment buildings with more than 7,000 units, and was one of Houston's biggest landlords.

Over the past four years, Gajavelli built his real-estate empire using funds from dozens of small investors who wanted a chance to earn a landlord's riches without any of the work. He pitched double-your-money returns in ebullient, can-do talks at investor conferences and on YouTube videos.

He described buying buildings with plans to upgrade units, raise rents and sell for a profit after as little as three years. The idea that everybody needs a place to live was the bedrock of Gajavelli's pitch. "I never worry about [the] economy now," Gajavelli told investors in a webinar presentation last year for his company, Applesway Investment Group. "Even if [the] economy goes down, still I make money."

Gajavelli's investors were, in fact, highly vulnerable to interest-rate increases over the past year that crushed the business model they and thousands of others in similar deals across the U.S. had hoped would make them wealthy. For them and a host of small investors -- who were expecting a share of rents and a piece of the profit in an eventual sale -- it is looking like a looming investment-property disaster.

In April, Gajavelli's company lost more than 3,000 apartments at four rental complexes taken in foreclosure, one of the biggest commercial real-estate blowups since the financial crisis. Investors lost millions. Gajavelli didn't respond to requests for comment.

His company had taken out commercial real-estate loans that carried floating interest rates and were adjusted each month. Those types of loans in 2021 offered initial rates as low as 3.5%. Everything changed when the Federal Reserve began raising rates last year, driving up monthly loan payments. Inflation contributed to higher expenses, and Applesway couldn't raise rents fast enough to keep pace. After bills went unpaid, company properties went into foreclosure.

Gajavelli is one of thousands of real-estate entrepreneurs in the U.S. known as syndicators. Many have come under similar financial pressures and hold properties they can no longer afford. From 2020 through 2022, real estate syndicators reported raising at least $115 billion from investors, according to a Wall Street Journal analysis of Securities and Exchange Commission filings.

So far, defaults have been rare. But real-estate analysts and property investors anticipate a wave of foreclosures ahead.

Congress in 2012 opened the door to the syndicators with a law that made it easier to market real-estate investments online. The law, intended to open financial opportunities to lower-income people, greatly expanded the reach and audience for syndicator deals.

Syndicators largely favored apartment complexes in the South and Southwest, where real-estate prices were lower, rents were rising and housing regulations were generally looser. Many of these locales had fewer renter protections, which made it easier to evict tenants and raise rents.

The rental-market boom made millions for syndicators and their investors through rising rents and escalating property values. Average rent for a one-bedroom apartment in Phoenix has increased 37% since January 2021, driven by pandemic migration and a limited housing supply, according to the rental listing site Zumper. "There was this huge mania where people wouldn't even look at the unit," said Colin Ralls, principal of Phoenix-based property manager Acora Asset Management. Prospective tenants would just apply, he said.

Syndicator investors have few legal protections, said Joan MacLeod Heminway, a securities-law professor at the University of Tennessee in Knoxville. Unlike public companies, syndicators in many cases aren't required to give regular updates on their buildings' financial performance, she said. As limited partners, investors have no say over spending. Some who lost their investment never knew the properties were in trouble until they were near foreclosure.

Munzer Haque, a former IT professional in Plano, Texas, said he was Applesway's largest individual investor in the company's four foreclosed properties and in two others he described as in trouble. Haque said he and his wife, both in their 60s, lost millions of dollars, the majority of their life savings. Their two adult children also invested in Applesway and lost money, he said.

"When you trust the wrong person, that's the highest risk," Haque said, "because you give them everything."

Many syndicators are racing to either raise funds or sell properties before tipping into foreclosure. Most hold balloon-payment loans that require repayment when they come due this year or next. Those syndicators face large payouts at a time when getting new, more affordable property loans will be difficult. Even firms with multibillion-dollar portfolios have used syndication to buy apartment buildings that no longer make enough money to cover debt payments, bond documents show.

"The bubble is going to start popping if these guys can't get out of these deals in time," said Ralls, of Acora Asset. Lenders also risk heavy losses.

This account of Gajavelli and Applesway is based on interviews with his investors, tenant organizers and others who did business with him and his company, as well as securities filings, investor documents, social-media posts and property records.

Gajavelli grew up in a lower-middle-class family in rural India before immigrating to the U.S., he said in one of his promotional videos. After finishing one exhausting workweek, he said, he was struck by a thought that changed his life: "I'm sick and tired of working for my money."

That was when he decided to become a landlord, he said. In time, "I was able to replace my IT income," he told prospective investors last year in a webinar. "I live on my own terms."

Gajavelli passed on that message to Shri Sinha, another IT professional, saying he had acquired more than $400 million worth of rentals and was looking to buy more. "That's what got me attracted to him," Sinha recalled.

They were on a bus tour of Dallas apartment buildings last year, hosted by real-estate investing coach Brad Sumrok, who drives a Ferrari with the vanity license plate "APT KING," according to his social-media posts. He, too, assembles investors as a syndicator to buy apartment buildings. Sumrok also charges for membership in his real-estate investment clubs -- as much as $35,000 a year -- where he teaches the ropes to prospects.

"Just love collecting rent from 9,716 miles away," Sumrok said in one post. "Invest in apartments and make money while you travel."

Gajavelli belonged to one of Sumrok's clubs, the "Millionaire Multifamily Mastermind," and he had joined Sinha that day on a tour of buildings that showed off the past success of club members and showcased properties that offered new chances at riches.

After meeting Gajavelli, Sinha agreed to invest $75,000 in a 706-unit apartment complex called Reserve at Westwood in southwest Houston. The complex was selling for $76 million, and Gajavelli told investors that with rent increases, they could more than double their money in three to five years, Sinha said.

High demand for affordable housing and a limited supply meant working-class renters had few options, Gajavelli told investors. "Unfortunately, they don't have good credit. They don't have down payments to buy the home," he said in a webinar for prospective investors last year. "They live in apartments forever."

That calculation propelled thousands of similar apartment deals by investors across the U.S. who hunted for buildings where they believed tenants could be charged much higher rents than what they were paying. In Sunbelt cities such as Phoenix, Las Vegas and Atlanta, these so-called value-add purchases accounted for more than 60% of all rental-apartment building sales over the past decade, according to property-data firm CoStar Group.

"As soon as someone detects a property with rents priced below market, it's now guaranteed a syndicator steps in and changes that," said Anton Mattli, chief executive of Peak Financing, a company in the Dallas area that has arranged loans for syndicators.

Syndicators generally invest little of their own money. They collect acquisition fees from investors that typically go from about 2% to as high as 5% of an apartment building's purchase price. They also take management fees of 2% to 3% from the building's gross income. Syndicators often profit even if the investment is a failure, which real-estate analysts say encourages excessive risk-taking at the expense of inexperienced investors.

During the pandemic, syndicators found it easier than ever to raise money. Sean Tate, a Dallas-based real-estate attorney who has worked with syndicators, said he was inundated with calls from people seeking help to syndicate rental-apartment deals.

Many of the callers learned about the chance to become a landlord from social-media ads, Tate said, and had little idea of what they were getting into. "You couldn't get on Facebook without the algorithm saying 'Deal! Deal! Buy multifamily!' " he said.

One of Sumrok's mentors, Grant Cardone, a former car salesman from Louisiana turned syndicator, has amassed 4.3 million Instagram followers, and his company bought $618 million worth of apartments in 2019, according to CoStar. In one December 2020 presentation, Cardone tells the audience that making only $400,000 a year is embarrassing. "My plane eats $2.7 million a year," he said. Cardone didn't respond to a request for comment.

A video for prospective Applesway investors that was posted in December 2021 featured the 704-unit Houston apartment complex called Timber Ridge. Applesway, Gajavelli's company, bought the complex that month for $56.7 million with plans to more than double investor returns by raising rents and adding tenant fees for washing machines and covered carports.

The investor video showed a tidy complex of apartments arranged around a shimmering swimming pool. By summer 2022, the pool water had turned a sickly green. High piles of trash littered the parking lot. Tenants complained to city officials about rats, mold, illegal evictions and the failure of management to properly maintain the buildings.

Last July, Houston Mayor Sylvester Turner visited the Timber Ridge Apartments and threatened legal action. "The situation that the people are living in right now is deplorable," Turner said at a news conference in the property's parking lot. "And none of us would want to live in it."

"The tenants were desperate," said Mitzi Ordonez, a former staff member of the nonprofit Texas Organizing Project. The group had worked with the mostly low-income, Spanish-speaking tenants to get help from the city.

For most of 2022, Applesway sent brief updates to investors about the company's various properties, as well as monthly cash disbursements based on the amount of their investment.

Sinha said the first big sign of trouble came this year in a late February email. Gajavelli asked investors for additional funds to shore up property finances at Reserve at Westwood, the Houston apartment complex he had invested in. "I want to let you know that things are not going well," Gajavelli wrote.

In March, Gajavelli told investors no money was needed after all. In early April, he sent investors letters telling them the buildings had gone into foreclosure. "Few things are more painful than having to notify investors of a failed business," he wrote.

Gajavelli offered a silver lining. "We suggest that you contact your tax advisor to discuss how your investment loss can be recognized on your tax filings," he wrote." [1]

This expat from India knows this and that. In America, losses can sometimes be deducted from profits to reduce taxes. But if you lost everything you had and there is no profit - you lost.

1. A Housing Bust Comes for Small-Time Investors --- Thousands of people risk losses in apartment-building purchases. Parker, Will; Putzier, Konrad; Shifflett, Shane. 
Wall Street Journal, Eastern edition; New York, N.Y. [New York, N.Y]. 24 May 2023: A.1.

Kokiam karui ruošiasi NATO rytinio flango šalys?

 

„NATO rytinio flango valstybės persiginkluoja ir ruošiasi karui, bet Vokietija ir dauguma kitų didžiausių NATO narių – ne.

 

Dėl praėjusių metų įvykių Ukrainoje visos Šiaurės Atlanto sutarties organizacijos narės pažadėjo padidinti karinius biudžetus. Narės įsipareigojo pateikti kelių milijardų dolerių ginklų užsakymus ir pastatyti ginklų pramonę ant karo pagrindo.

 

Tačiau, praėjus daugiau, nei metams, šalys juda labai skirtingu greičiu.

 

Didžiausia takoskyra tarp kaimynių Vokietijos ir Lenkijos. Remiantis nauja Vokietijos ekonomikos ekspertų centro IFO instituto analize, Berlynas šiemet nepasieks 18,5 mlrd. eurų. Atotrūkis ypač didelis, nes Vokietijos ekonomika yra maždaug šešis kartus didesnė už Lenkijos.

 

Didėjantis gynybos prioritetų skirtumas tarp dviejų didžiausių Europos šalių smarkiai sumažina Vakarų sąjungininkų įtampą dėl jų noro įsipareigoti persiginkluoti. Konfliktui įžengus į lemiamą fazę prieš numatomą Ukrainos puolimą ir didėjant užsitęsusio konflikto dėl išsekimo perspektyvai, ištikimiausi Kijevo šalininkai teigė, kad Europa turi sekti JAV Demokratų vadovybę ir pasiruošti išplėstinei konfrontacijai.

 

Nors nė viena NATO narė atvirai neprieštarauja tokiai pozicijai, daugelis biudžetus didina tik pamažu, o kai kurios, įskaitant Kanadą, Ispaniją ir Italiją, net išleidžia mažiau, palyginti su BVP. Išlaidų lygis žada būti karštų ginčų klausimas, kai NATO lyderiai liepos mėnesį susitiks kasmetiniame viršūnių susitikime Vilniuje, Lietuvoje.

 

NATO narės 2014 metais susitarė iki kitų metų gynybai skirti bent 2% bendrojo vidaus produkto. Aljanso duomenimis, pernai tik septynios iš 30 NATO narių pasiekė 2 proc., įskaitant Lenkiją.

 

Po įvykių Ukrainoje 2022 m. vasario mėn. daugelis narių įsipareigojo padidinti išlaidas. Šalys, esančios arčiausiai Rusijos, išlaidas didino agresyviausiai, o toliau į vakarus esančios narės judėjo lėčiau.

 

NATO duomenimis, Vokietijoje, didžiausioje Europos ekonomikoje, gynybos išlaidos pernai siekė 1,5 % BVP, tačiau praėjus kelioms dienoms po konflikto pradžios, kancleris Olafas Scholzas pažadėjo kasmet viršyti 2 % tikslą ir paskelbė apie nebiudžetinio fondo kūrimą su 100 milijardų eurų, arba apie 108 milijardus dolerių, fondo, skirto persiginklavimui paspartinti.

 

Nuo to laiko Vokietijos karinės išlaidos beveik nepakilo, o fondas liko beveik nepaliestas. Ekonomistai teigė, kad tokiais tempais Vokietija gali nepasiekti 2% tikslo ir netgi dar labiau atsilikti.

 

Vokietijos finansų ministerija atsisakė komentuoti, ar Vokietija pasieks NATO tikslą. Gynybos ministerijos atstovas sakė, kad Vokietijos išlaidos gynybai toliau didės ir vidutiniškai per penkerius metus sieks 2% BVP.

 

IFO apskaičiavo, kad 2% Vokietijos BVP šiemet sudarytų 81,1 milijardo eurų, o karinėms išlaidoms dėl to pritrūks 17,1 milijardo eurų. Tai yra didžiausias NATO pinigų vertės trūkumas, nors 14 kitų narių, kurių ekonomika yra mažesnė, turi didesnį BVP trūkumą, nurodė IFO.

 

Lenkija, priešingai, šiemet pirmauja NATO pagal karines išlaidas procentais nuo BVP – 4,3 proc., rodo IFO analizė. Varšuva, atvira Ukrainos gynėja ir Rusijos priešininkė, nuo 2021 metų šią dalį padidino daugiau, nei dvigubai, pranešė IFO.

 

Ji pateikė daug didelių ginklų užsakymų iš JAV ir Pietų Korėjos, įskaitant orlaivius ir tankus.

 

IFO duomenimis, Lenkijoje 2% BVP šiais metais sudarytų apie 14,8 milijardo eurų, o išlaidos viršys 16,9 milijardo eurų. Tai būtų beveik lygiai tokia pati piniginė vertė, kaip ir Vokietijos trūkumas.

 

Lenkija paragino savo didesnes sąjungininkes, įskaitant Vokietiją ir Prancūziją, skirti daugiau lėšų gynybai. Ministras pirmininkas Mateuszas Morawieckis neseniai duotame interviu pagyrė Scholzo įsipareigojimą praėjusiais metais kaip „gana drąsų“, tačiau apgailestavo, kad veiksmų tempas „neatitinka tikslų“.

 

Viena iš akivaizdaus Vokietijos nuosmukio priežasčių yra infliacija, kuri padidina Vokietijos nominalųjį BVP, todėl tikslą pasiekti vis sunkiau. Net oficialiais NATO skaičiavimais, naudojant pastovius 2015 metų dolerius, Vokietija linkusi atsilikti nuo sąjungininkių. Infliacija ir didėjančios finansavimo išlaidos taip pat turi įtakos pinigų išleidimui, pavyzdžiui, didėja eksploatacinės išlaidos ir atlyginimai, o karinė įranga tampa mažiau prieinama.

 

Išlaidoms įtakos turi ir politiniai skaičiavimai. Nors finansų ministras Christianas Lindneris palankiai vertina didesnes karines išlaidas, jis atmetė galimybę didinti mokesčius ar padidinti biudžeto deficitą, kad tai būtų finansuojama, bent jau nemažinant išlaidų kitur.

 

Lenkas Morawieckis sakė, kad nors jis mano, kad vis didesnė Vokietijos lyderių dalis palaiko Scholzo karinių išlaidų perkėlimą, jis taip pat mato, kad „tam tikra jų politinio elito ir verslo elito dalis norėtų grįžti į įprastą verslą, ir tai man kelia nerimą. “.

 

Vokietija gerokai padidino savo paramą Ukrainai, bet ne visa tai skaičiuojama, kaip karinės išlaidos. Ukrainos prezidentas Volodymyras Zelenskis neseniai Berlyne pareiškė, kad Vokietija tapo antra pagal dydį jo šalies ginklų tiekėja po JAV, įskaitant neseniai paskelbtą paketą, kurio vertė siekia 2,7 milijardo eurų." [1]

 

  Kokiam karui ruošiasi NATO rytinio flango šalys? Jei šis karas yra branduolinis, pasiruošimo nereikia. Juk gana greitai jie dainuos su angelais be brangių pasiruošimų. Taigi NATO rytinio flango valstybės nesupranta, kokiame pasaulyje jos gyvena. NATO rytinio flango šalys eikvoja žmonijos išteklius. Lenkijos premjeras Morawieckis dar pasisako už mirties bausmės įvedimą, atrodo, kad dėl to angelai irgi nebus patenkinti, Morawieckį matydami.

1. Defense Spending Divides NATO. Michaels, Daniel. 
Wall Street Journal, Eastern edition; New York, N.Y. [New York, N.Y]. 24 May 2023: A.1.

What War Nations of NATO's Eastern Flank Are Preparing For?

 

"Nations of NATO's eastern flank are rearming and preparing for war. But Germany and most of NATO's other biggest members aren't.

Events in Ukraine last year drew promises from across the North Atlantic Treaty Organization to boost military budgets. Members have pledged to place multibillion-dollar weapons orders and put arms industries on a war footing.

But, more than a year later, countries are moving at sharply different speeds.

That divide is greatest between neighbors Germany and Poland. Berlin this year will fall $18.5 billion short of a pivotal NATO benchmark, while Poland will spend almost exactly the same amount above that threshold, according to a new analysis by Germany's IFO Institute, an economic think tank. The gap is particularly stark because Germany's economy is about six times the size of Poland's.

The widening gulf in defense priorities between two of Europe's largest countries puts in sharp relief the broader tension among Western allies over their willingness to commit to the rearming. With the conflict entering a crucial phase before an expected Ukrainian offensive and the prospect of a protracted conflict of attrition increasing, Kyiv's staunchest supporters said Europe must follow the U.S. lead and prepare for an extended confrontation.

While no NATO members openly oppose that position, many are lifting budgets only haltingly and a few, including Canada, Spain and Italy, are even spending less relative to GDP. Spending levels promise to be a hotly contested issue when NATO leaders meet for their annual summit in Vilnius, Lithuania, in July.

NATO members agreed in 2014 to spend at least 2% of gross domestic product on defense by next year. Last year, only seven of 30 NATO members achieved 2%, including Poland, according to the alliance.

Following events in Ukraine in February 2022, many members committed to increase spending. Countries closest to Russia have increased outlays most aggressively, while members farther west have moved more slowly.

Defense spending in Germany, Europe's largest economy, stood at 1.5% of GDP last year, according to NATO, but days after the conflict started, Chancellor Olaf Scholz pledged to surpass the 2% target every year and announced the creation of an off-budget defense fund of 100 billion euros, or about $108 billion, to accelerate rearmament.

Since then, German military spending has barely budged and the fund remains almost untouched. Economists said that at this pace, Germany might not reach the 2% target and could even fall further behind.

The German Finance Ministry declined to comment on whether Germany would hit the NATO target. A spokesman for the Defense Ministry said Germany's defense spending would keep rising and reach 2% of GDP over five years on average.

IFO calculated that 2% of German GDP this year would be 81.1 billion euros, and military spending will miss that by 17.1 billion euros. That is NATO's largest shortfall in money value, although 14 other members with smaller economies have greater shortfalls in relation to GDP, IFO said.

Poland, in contrast, will lead NATO in military spending as a percentage of GDP this year, at 4.3%, according to the IFO analysis. Warsaw, an outspoken advocate for Ukraine and opponent of Russia, has more than doubled that proportion since 2021, IFO said. 

It has placed large weaponry orders from the U.S. and South Korea, including for aircraft and tanks.

In Poland, 2% of GDP this year would be about 14.8 billion euros, and spending will top that by 16.9 billion euros, according to IFO. That would be almost exactly the same monetary value as Germany's shortfall.

Poland has urged its larger allies, including Germany and France, to spend more on defense. Prime Minister Mateusz Morawiecki in a recent interview praised Scholz's commitment last year as "quite brave," but lamented that the pace of action "is not meeting targets."

One reason for Germany's apparent backsliding is inflation, which boosts Germany's nominal GDP, making it ever harder to reach the target. Even in official NATO calculations using constant 2015 dollars, Germany tends to lag behind allies. Inflation, and rising financing costs, also affect how money is spent, for example by raising running costs and wages while making military gear less affordable.

Political calculations also affect spending. While Finance Minister Christian Lindner is sympathetic to higher military spending, he has ruled out raising taxes or increasing the budget deficit to fund it, at least without equivalent spending cuts elsewhere.

Poland's Morawiecki said that while he believes a growing proportion of leading figures in Germany support Scholz's shift on military spending, he also sees that "some part of their political elite and business elite would want to go back to business as usual, and this worries me."

Germany has significantly increased its support for Ukraine, but not all of that counts as military spending. President Volodymyr Zelensky of Ukraine said in Berlin recently that Germany had become his country's second-largest weapons supplier after the U.S., including a recently announced package valued at 2.7 billion euros." [1]

 What war nations of NATO's eastern flank are preparing for? If this war is nuclear, no preparation is needed. They will sing with angels pretty soon without expensive preparations anyway. So, nations of NATO's eastern flank don't understand what world they are living in. Nations of NATO's eastern flank are wasting humanity's resources. Polish Prime Minister Morawiecki is again in favor of the introduction of the death penalty, it seems that the angels will not be happy about that either, seeing Morawiecki.

 

1. Defense Spending Divides NATO. Michaels, Daniel. 
Wall Street Journal, Eastern edition; New York, N.Y. [New York, N.Y]. 24 May 2023: A.1.

Skaitmeniniai taupomojo banko laiškai blokų grandinėje pirmą kartą

"Šių vardinių vertybinių popierių pardavimo procesas anksčiau užtrukdavo iki septynių dienų. Dabar viskas vyksta per kelias sekundes – dėka blokų grandinės technologijos.

Fondų bendrovė „Deka“ skatina „blokų grandinės“ technologijos naudojimą vertybinių popierių versle „Sparkassen-Finanzgruppe“. Trys taupomosios kasos dabar pirmą kartą surinko pinigų, išleisdamos ir parduodamos ("emisija") skaitmeninius "taupomųjų kasų laiškus" – daugiausia iš kitų taupomųjų kasų. „Išleidus skaitmeninius vertybinius popierius, skaitmeninis taupomosios kasos laiškas yra kitas žingsnis Deka skaitmeninimo strategijoje“, – pranešime spaudai sako Martinas K. Mülleris, atsakingas už bankininkystę ir vertybinių popierių saugojimo veiklą Deka valdyboje. Skaitmeninis taupomojo banko laiškas yra pirmasis „blokų grandinės“ pagrindu pagamintas produktas, pasiekęs visą rinkos brandą.

Taupomųjų kasų grupėje cirkuliuojantys „taupomųjų kasų laiškai“ ypatingi tuo, kad jie yra registruoti popieriai. Todėl šios obligacijos išleidžiamos kreditoriaus vardu ir, skirtingai, nei pareikštinės obligacijos, kurios labiau tinka privatiems investuotojams, nėra lengvai perleidžiamos kitiems. Todėl jomis retai prekiaujama biržose, o tik tiesiogiai tarp pardavėjo ir pirkėjo, dažniausiai iš institucinio sektoriaus. Kol kas įrodymas, kad taupomosios kasos laiškas priskirtas kaip vardinė obligacija, buvo popierinis: pirkėjas nurodo pirkimą, o pardavėjas – perleidimą, – aiškina Deka. Po to šis procesas užtrunka iki septynių dienų.

„Lengviau, greičiau, saugiau“

Naudojant blokų grandinės technologiją, dabar tai galima padaryti per kelias sekundes. Kaip antradienį paskelbė taupomųjų kasų vertybinių popierių namai, „Deka“ veikė, kaip registratorius ir mokėjimų tarpininkas, atliekant šią pirmąją taupomojo banko laiškų operaciją ir ją įvykdė. Sandoriai techniškai įgyvendinami SWIAT GmbH „blockchain“ platformoje, kuri nuo šių metų yra bendra įkūrėjo „Deka“ ir naujųjų akcininkų „Landesbank Baden-Württemberg“, Didžiosios Britanijos ir Azijos banko „Standard Chartered“ bei „fintech Comyno“ įmonė.

Blokų grandinė yra nuolat plečiamas įrašų sąrašas atskiruose blokuose, kurie pridedami prie esamos grandinės. Ši technologija geriausiai žinoma dėl viešųjų blokų grandinių, kurios yra kriptovaliutų, tokių, kaip Bitcoin ir Ether, kasimo ir pervedimo pagrindas. Ethereum blokų grandinė taip pat naudojama, kaip skaitmeninių vertybinių popierių pagrindas. Taupomųjų banko laiškų atveju vertybiniai popieriai saugomi ir perduodami per privačiai valdomą blokų grandinę. Kartu su viešuoju tinklu šios privačiai organizuotos blokų grandinės vertybinių popierių versle turi labai aukštą apsaugos nuo manipuliavimo lygį. Viena vertus, šis saugumas turi būti užtikrintas, vienu metu saugojant daugelyje serverių, o iš kitos pusės – būtinu daugelio dalyvių sutikimu („konsensusu“), perleidžiant vertybinius popierius naujiems savininkams. Tai taip pat vadinama decentralizuotu registru arba didžiąja knyga (Distributed Ledger Technology, DLT).

Decentralizuotos blokų grandinės sukuria potencialią konkurenciją centrinėms rinkoms, tokioms, kaip Deutsche Börse, vertybinių popierių versle. Trys taupomosios kasos, dalyvaujančios Deka sandoryje iš Dortmundo, Liudvigsburgo ir Schwarzwald-Baar, giria paprastesnį ir greitesnį skaitmeninių taupomųjų kasų laiškų prekybos būdą, taigi ir refinansavimą. Tai daro produktą patrauklesnį emitentams ir investuotojams. „Blokų grandinės“ sutarimo procesas siūlo, precedento neturintį, saugumo standartą, sako Deka. Tačiau skaitmeninėje formoje teisinis pagrindas išlieka nepakitęs, nes verslo sandoris vyksta, kaip ir anksčiau."