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Private Credit Tokenization

Definition

Private credit tokenization converts loans made by non-bank lenders into digital tokens on a blockchain. This process involves representing illiquid private credit assets, such as direct loans to corporations or real estate debt, as digital tokens on a blockchain. By converting these traditional debt instruments into programmable digital units, private credit tokenization aims to enhance liquidity, broaden investor access, and streamline administrative processes. It can also enable fractional ownership and secondary market trading for assets historically confined to private placements.