Financial tech provider FIS and structured finance platform Intain are launching a blockchain-based marketplace built on Avalanche (AVAX) that enables regional and community banks to securitize and sell loan portfolios directly to institutional investors, the firms announced to CoinDesk.
Dubbed Digital Liquidity Gateway, the platform tokenizes loans as non-fungible tokens (NFTs), automates settlement processes—including payments with stablecoins like USDC—and eliminates multiple intermediaries that often make asset-backed finance slow and costly. It is fully integrated with FIS’s core banking systems, which provide software and payment infrastructure to more than 20,000 clients worldwide.
This initiative aligns with a broader industry trend, as asset managers, banks, and fintech companies increasingly place assets onto blockchain networks through a process known as tokenization of real-world assets (RWA). While many existing efforts focus on large institutions, Intain and FIS are targeting the long tail of community and regional banks. These banks fund much of local small business lending but rarely access securitization markets.
“These small banks are remote from most capital markets flows,” said John Omahen, head of digital assets at FIS, in an interview. “They originate loans and often hold onto them because they don’t have the expertise to structure deals or reach investors. What we’re doing is creating a place where those assets can meet demand, and capital can move more efficiently.”
### Loan Tokenization to Increase Transparency
Recent failures and controversies, including incidents involving auto lender Tricolor and car parts manufacturer First Brands, have highlighted how weak data controls and opaque loan tracking can lead to double-pledging, mispricing, and investor losses.
A key feature of Digital Liquidity Gateway is loan tokenization, where each loan is converted into an NFT backed by loan documents, data from FIS systems, and third-party verification. Intain’s AI engine reconciles documents and ensures data accuracy before minting the NFT, which becomes traceable and tamper-resistant.
“Suddenly, what was an off-chain asset, untraceable, is now on-chain,” said Siddhartha, CEO of Intain, in an interview. “That means if I’m an investor in a tokenized asset-backed security, I can zoom in and see the hundreds of individual loans that back it, with the assurance that they’re recorded on-chain and can’t be double pledged.”
### Streamlining Traditional Finance with Blockchain
The platform demonstrates how traditional finance (TradFi) institutions can leverage blockchain technology to streamline operations and open up new markets. For regional banks, this could translate into faster access to liquidity, reduced paperwork, and increased capacity to lend within local communities.
“Asset-backed finance is about capital flows,” Omahen added. “This platform helps banks unlock balance sheet capacity so they can make more loans and serve their communities better.”
https://bitcoinethereumnews.com/tech/tokenized-loan-platform-aims-to-modernize-small-bank-lending/
