Property network Coadjute has announced plans to allow retail banks in the UK to issue a mortgage stablecoin, working in partnership with global technology firm R3. 

It says the service will improve the movement of mortgage funds, which amounts to over £240bn a year in the UK. 

The network, which went live in July,  says its stablecoin will be the first in the world expressly designed to speed up the completion of mortgages.

The Coadjute network will be running trials of the new Mortgage Stablecoin service in November with several major UK mortgage lenders, along with legal and banking software providers. 

The system is based on R3’s Corda enterprise blockchain technology, which is behind many large-scale financial networks, including Italy’s Spunta Banca distributed ledger technology, which is used by over 100 Italian banks for settlement, 91% of the Italian banking market.

In its first six months, Spunta Banca DLT processed 204 million transactions. 

It says currently in the mortgage process multiple parties move large amounts of money between a complex array of accounts, often using email and phone calls to communicate and check details.

This creates high levels of administration which frequently cause last-minute delays in completion, and the familiar ‘Friday afternoon rush’. It adds the traditional process is also vulnerable to fraud. 

The firm says its mortgage stablecoin also lowers costs by moving funds over its network and not solely through traditional payment systems. 

It adds that banks can more closely manage liquidity and forecasts on mortgage inflows and outflows and cut down the potential for fraud from authorised push payments.

Coadjute chief operating officer John Reynolds says: “The opportunity to reduce push payment fraud is particularly significant. We enable conveyancers to continue to manage transactions but without having to take on the risk of holding cash in client accounts.

“This, in turn, could unlock lower Professional Indemnity Insurance premiums, potentially by more than 15%, a significant saving for a sector struggling with recent PI insurance increases”. 

R3 chief revenue officer Cathy Minter adds: “R3’s Corda technology is perfectly suited to support Coadjute’s work to provide friction-free, secure transactions for the property industry. Distributed ledger technology has demonstrated its value in transforming industries time and time again – Coadjute’s use of distributed ledger technology to connect the property market is no exception.”