Asset manager WisdomTree launched its Private Credit and Alternative Income Digital Fund (CRDT), a tokenized private credit vehicle, amid an uptick in firms expanding into the tokenized private credit niche and other tokenized real-world assets (RWAs).
The fund will include credit extended to private corporations, loans made to real estate investment trusts (REITs), which are funds that track baskets of commercial properties, and debt from business development corporations, which are investment companies that offer financing to other businesses, according to Friday’s announcement.
CRDT is available to retail and institutional investors, expanding access to an asset class typically reserved for institutional and sophisticated investors.
Tokenization is the process of converting ownership or rights to an asset, physical or digital, into a digital token on a blockchain.
Tokenized private credit instruments now account for over $16.7 billion in value, and the market has steadily grown since 2021, according to RWA.xyz.
Tokenized funds of all types, including US Treasury funds, money market funds, which invest in yield-bearing debt, private equity funds and other alternative investment vehicles continue to grow in market cap and popularity as the legacy financial system moves onchain.
Related: Tokenized alternative funds jump 47% to $1.7B in 30 days
Tokenized funds become all the rage as several firms announce offerings
Investment bank Goldman Sachs and banking institution Bank of New York (BNY) Mellon offered access to tokenized money market funds for institutional investors in July.
State Street, one of the “big three” asset managers, which includes BlackRock and Vanguard, signed on as the first custodian for financial services company JPMorgan’s tokenized debt platform in August.
State Street completed the platform’s first transaction by purchasing $100 million in tokenized commercial debt from the Oversea-Chinese Banking Corporation (OCBC), one of Southeast Asia’s oldest banking institutions.
Oracle provider Chainlink, UBS, an asset manager with $5.9 trillion in assets under management, and RWA exchange DigiFT, launched a pilot program to test tokenized fund settlement in Hong Kong in September.
BlackRock, the world’s largest asset manager with over $12.5 trillion in assets under management, is reportedly exploring tokenizing exchange-traded vehicles (ETFs), funds, or baskets of equities that are listed on stock exchanges.
Tokenizing ETFs could increase capital velocity and allow the tokenized investment vehicles to be used as collateral in DeFi applications.
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