US-based equipment finance platform Trad.Fi announced plans to bring up to $650 million in private credit onchain over the next 48 months.
The initiative targets one of the largest and least digitized credit markets in the US, the trillion-dollar industry funding manufacturing equipment, industrial systems and residential solar installations, according to an announcement shared with Cointelegraph.
Trad.Fi said the $650 million is not deployed capital but a credit pipeline that will be minted onchain, backed by committed senior credit facilities and signed Letters of Intent from anchor borrowers. The company said it currently has about $85 million in signed term sheets and about $40 million expected to close imminently.
The initiative seeks to address the financing chokepoint in the manufacturing industry by reducing digital credit approval to a single business day, compared with weeks or months of approval time for traditional lines of credit.
US equipment financing is a fast-growing industry that still relies on paperwork, making credit approval slower and costing businesses, said Alexander Szul, CEO of Trad.Fi.
He added:
“Small businesses lose deals waiting for financing, and the only way to fix that is to move the capital, the records and the workflow onto programmable rails.”
Investors to gain exposure through tokenized credit pool
The initiative will also include an onchain investment pool that gives investors exposure to the equipment-finance loans originated through the platform. The pool will be operated by a third party that has not yet been named and is expected to launch in the coming weeks. US-based investors will not be eligible during the initial phase.
W3 will provide the infrastructure for tokenizing the loans and managing the associated credit records across the Base, Arc and Avalanche blockchains. Legal agreements tied to the loans, including UCC-1 filings and borrower documentation, will remain offchain.
Other companies that offer similar tokenized credit products include Centrifuge, Tradable, Maple Finance, Figure Technologies and Credix.
The initiative would add to the growing market for tokenized real-world assets (RWAs), although the sector has cooled in recent weeks, with total value falling 4.4% over the past 30 days to $31.3 billion.
Total RWA value by category. Source: RWA.xyz
Tokenized US Treasury debt accounted for $14.8 billion of the total RWA market, while tokenized corporate credit accounted for $1.2 billion as the smallest segment, according to RWA.xyz data.
Magazine: Can Robinhood or Kraken’s tokenized stocks ever be truly decentralized?
Leave a Reply
You must be logged in to post a comment.