Singapore-based blockchain platform DigiFT is poised to transform the financial landscape by tokenizing a $6.3 billion private credit fund managed by Invesco. This significant move represents a crucial step in merging traditional finance with cutting-edge blockchain technology.
Institutional investors will now have the opportunity to purchase tokenized shares of the fund using U.S. dollars or stablecoins such as USDC and USDT. The Invesco private credit fund primarily focuses on senior secured loans and has consistently provided a 4.5% annual net yield since its inception in 2006, according to DigiFT’s CEO.
What sets this fund apart from other tokenized private credit funds is its daily liquidity, offering investors a more flexible investment option. The process of tokenization, which involves converting traditional assets into digital formats on the blockchain, is rapidly gaining traction. Currently, around 80% of real-world assets on-chain are private credit, highlighting a significant trend in the financial sector.
Invesco, managing $1.9 trillion in assets, is venturing into fund tokenization for the first time through this collaboration with DigiFT, despite its previous engagement with crypto-linked exchange-traded funds. The asset management firm anticipates that tokenized funds could handle up to $600 billion by 2030, potentially accounting for 1% of total mutual and exchange-traded fund assets.
DigiFT has solidified its position as a key player in the tokenization market, recently becoming the inaugural distribution partner for a tokenized money market fund. Operating under Singaporean regulations, DigiFT is recognized as both a market operator and a capital markets entity.
Settlements for DigiFT’s tokenized Invesco fund will take up to five days, even though investors can redeem tokens daily. To enhance liquidity, plans are underway to develop an on-chain liquidity pool, enabling rapid token redemption at minimal discounts.
With major asset managers like Franklin Templeton and BlackRock embracing tokenization, DigiFT’s latest initiative underscores the growing integration of blockchain technology in traditional finance.
