Tokenized Loan Platform Aims to Modernize Small Bank Lending
The post Tokenized Loan Platform Aims to Modernize Small Bank Lending appeared com. Financial tech provider FIS and structured finance platform Intain are rolling out a blockchain-based marketplace built on AVAX$17. 36 that allows regional and community banks to securitize and sell loan portfolios directly to institutional investors, the firms told CoinDesk. Digital Liquidity Gateway, as it is dubbed, tokenizes loans as non-fungible tokens (NFTs), automates settlement including with stablecoins like USDC, and removes layers of intermediaries that often make asset-backed finance slow and costly. It’s integrated with FIS’s core banking systems that provide software and payment infrastructure to more than 20, 000 clients worldwide. The initiative fits into a broader shift as asset managers, banks and fintechs place assets onto blockchain rails in a process called tokenization of real-world assets (RWA). While many of those efforts focus on large institutions, Intain and FIS are aiming at the long tail of community and regional banks that fund much of local small business lending but rarely reach securitization markets. “These small banks are remote from most capital markets flows,” John Omahen, head of digital assets at FIS, said in an interview. “They originate loans and sit on them. 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 those at 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. Digital Liquidity Gateway’s key feature is loan tokenization, where each.
