DigiFT Tokenizes $6.3 Billion Private Credit Fund

Singapore-based blockchain platform DigiFT is set to tokenize a $6.3 billion private credit fund managed by Invesco, marking a significant move in bridging traditional finance with blockchain technology.

This initiative allows institutional investors to purchase tokenized shares of the fund using U.S. dollars or stablecoins such as USDC and USDT, according to Bloomberg. The Invesco private credit fund mainly invests in senior secured loans and has delivered a 4.5% annual net yield since its inception in 2006, as stated by DigiFT CEO Henry Zhang.

Unlike typical tokenized private credit funds, which have lengthy redemption cycles, this fund will provide daily liquidity, offering a more adaptable option for investors. The tokenization process, which converts traditional assets into digital representations on the blockchain, is rapidly increasing. According to rwa.xyz, 80% of real-world assets currently on-chain are private credit, driving this trend.

While Invesco, which manages $1.9 trillion in assets, has previously introduced crypto-linked exchange-traded funds, this partnership with DigiFT marks its inaugural foray into fund tokenization. The asset manager projects that tokenized funds could oversee up to $600 billion by 2030, which would represent 1% of the total assets in mutual and exchange-traded funds.

DigiFT, already a significant player in the tokenization arena, has recently become the first distribution partner for UBS’s uMint, a tokenized money market fund. The platform operates under Singaporean regulations, holding licenses as a market operator and capital markets entity.

Settlements for DigiFT’s tokenized Invesco fund will take up to five days, even though redemptions are accessible daily. Although liquidity providers oversee the underlying settlement, Zhang announced plans for an on-chain liquidity pool that would allow investors to quickly redeem tokens at a slight discount.

With major asset managers like Franklin Templeton and BlackRock embracing tokenization, DigiFT’s latest initiative underscores the growing integration of blockchain technology in TradFi.