At the recent RWA London Summit, one topic dominated my panel discussion: tokenized assets as collateral. A variety of views emerged, including using more exotic tokenized assets other than tokenized MMF as collateral.
While I recognize the potential of these alternative assets, I made one thing clear—this is a conversation about the future, not the present. Right now, tokenized products must meet investor demands, and illiquid assets simply don’t. Even the most prestigious credit names can’t bridge that gap.
Then came an unexpected twist. Bloomberg reported that DigiFT, a Singaporean startup, is launching a tokenized version of Invesco Ltd.'s $6.3B private credit fund. Given the Invesco brand and DigiFT’s role as a distributor for UBS’s first ever tokenized MMF, a slew of enthusiastic PR coverage followed the news.
This launch took a novel approach to private credit tokenization. I was impressed by the innovation, but one thing remained unchanged - most media and industry observers seemed to miss the fundamental challenge that still looms over tokenized private credit funds.
In this Weekly Research, I’ll break it all down:
What makes this private credit tokenization different from the rest
Why, despite its promising approach, it’s unlikely to solve the core problem
What market conditions are necessary to make illiquid asset tokenization viable
Let's dive in.