DigiFT to tokenize Invesco’s $6.3B private credit fund

Singapore-based blockchain platform DigiFT is set to tokenize a $6.3 billion private credit fund managed by Invesco, marking a major step in bridging traditional finance with blockchain technology. 

The move permits institutional investors to buy tokenized shares of the fund with U.S. dollars or stablecoins like as (USDC) USDC and USDT (USDT), according to Bloomberg. The Invesco private credit fund primarily invests in senior secured loans and has delivered a 4.5% annual net yield since its inception in 2006, DigiFT CEO Henry Zhang said.

Unlike most tokenized private credit funds, which have long redemption cycles, this fund will offer daily liquidity, making it a more flexible option for investors. Tokenization, the process of converting conventional assets into digital representations on the blockchain, is expanding quickly. 80% of real-world assets that are currently on-chain are private credit, which is driving this trend, according to rwa.xyz. 

Although Invesco, which manages $1.9 trillion in assets, has previously offered crypto-linked exchange-traded funds, this collaboration with DigiFT is its first attempt at fund tokenization. The asset manager estimates that tokenized funds could manage up to $600 billion by 2030, representing 1% of the total assets in mutual and exchange-traded funds.

DigiFT, already a key player in the tokenization space, recently became the first distribution partner for UBS’s uMint, a tokenized money market fund. The platform is subject to Singaporean regulations and is licensed as a market operator and capital markets entity.

Settlements for DigiFT’s tokenized Invesco fund will take up to five days, despite the fact that redemptions are available every day. While liquidity providers manage the underlying settlement process, Zhang disclosed plans to launch an on-chain liquidity pool that would enable investors to rapidly redeem tokens at a little discount.

With prominent asset managers like Franklin Templeton and BlackRock adopting tokenization, DigiFT’s most recent action highlights how blockchain is increasingly being used in TradFi.