DigiFT to tokenize Invesco’s $6.3B private credit fund, bridging traditional finance and blockchain.
According to Bloomberg, this move makes it possible for institutional investors to purchase tokenized shares of the fund using either U.S. dollars or stablecoins such as USDC and USDT Tether.
Since its founding in 2006, the Invesco private credit fund has generated a net yield of 4.5% annually, according to Henry Zhang, CEO of DigiFT. The fund’s primary investment is in senior secured loans.
This fund will offer daily liquidity, which will make it a more flexible option for investors. This is in contrast to the majority of tokenized private credit funds, which have lengthy redemption cycles.
The process of transforming traditional assets into digital representations on the blockchain is known as tokenization, and it is rapidly developing. RWA.xyz reports that private credit accounts for eighty percent of the real-world assets that are currently on-chain, which is the primary factor driving this growth.
This collaboration with DigiFT is Invesco’s first attempt at fund tokenization, despite the fact that the company has previously provided crypto-linked exchange-traded funds. Invesco manages assets worth $1.9 trillion.
According to the asset manager, tokenized funds have the potential to manage up to $600 billion by the year 2030. This amount would be equivalent to one percent of the total assets held by mutual and exchange-traded funds.
UBS’s uMint is a tokenized money market fund, and DigiFT, which was already a significant player in the tokenization area, just became the first distribution partner for the asset.
Licensed as both a market operator and a capital markets entity, the platform is subject to the regulations that are in place in Singapore. Despite the fact that redemptions are available on a daily basis, the settlement process for DigiFT’s tokenized Invesco fund might take up to five days to complete.
Zhang disclosed intentions to build an on-chain liquidity pool that would enable investors to promptly redeem tokens at a slight discount. This would be in addition to the fact that liquidity providers control the underlying settlement process.
As a result of notable asset managers such as Franklin Templeton and BlackRock implementing tokenization, DigiFT’s most recent action brings to light the growing utilization of blockchain technology in the trading industry.
