Blockchain Lending Boom: Tokenization of Private Credit Reaches Nearly $14 Billion

Gate News bot message, tokenization of private credit has quickly become one of the largest segments in the real-world assets (RWA) tokenization market, with active outstanding loans reaching $13.88 billion, far exceeding the $7.38 billion of tokenized U.S. Treasuries.

This innovation converts traditional private credit assets (typically loans or debt instruments issued by non-bank lending institutions) into digital tokens on the blockchain. Essentially, these tokens represent ownership of the underlying credit assets, enabling digital trading and management.

According to rwa xyz data, the market is dominated by a few key protocols. Figure leads with a total loan issuance of $12.78 billion, accounting for about 92% of the space. Other major participants include Tradable ($4.72 billion), Maple Finance ($3.38 billion), and TrueFi ($1.72 billion).

Mid-tier protocols such as Centrifuge ($594 million), PACT ($1.08 billion), and Curve Finance ($261 million) complement the ecosystem along with emerging platforms like Goldfinch ($170 million) and Creditx ($46 million).

The protocol operates across different blockchain networks, reflecting the technological maturity of the industry. Tradable utilizes Zksync Era for scalability, TrueFi operates on Ethereum, and PACT uses Aptos. This multi-chain infrastructure supports nearly $25 billion in cumulative loan issuance, while the current active loan amount is $13.88 billion.

Tokenization addresses the core limitations of traditional private lending. Proponents argue that by breaking loans down into blockchain-based tokens, tokenization can broaden financing channels for retail investors and enhance the liquidity of traditionally illiquid assets.

Smart contracts enable automated settlements, reducing management costs, while on-chain data ensures transparency of asset performance. The industry is growing rapidly, with new loans of about hundreds of millions of dollars added each month.

Despite strong momentum, tokenization credit accounts for less than 1% of the $1.6 trillion traditional private credit market, indicating its enormous expansion potential.