Blockchain-based Private Credit Market Rebounds 55% in 2023

• The blockchain-based private credit market has registered an impressive uptick.
• Businesses are turning to tokenized credit for transparency and lower interest rates.
• Protocols are lending to businesses across multiple industries.

According to the latest data insights, blockchain -based lending is regaining traction following a tumultuous year for crypto in 2022.

While still lower than its $1.5 billion peak in June last year, the tokenized private credit market has registered an outstanding 55% uptick since the beginning of 2023, bringing the total active blockchain-based loans to about $408 million as of November 28.

More Businesses Tapping Blockchain-based Private Credit

In a report dated December 18, Bloomberg attributes the market’s rejuvenation to a range of factors, including the increasing number of businesses seeking relatively affordable borrowing costs as traditional lenders charge double-digit rates in the current financial environment.

While most loans backed by the U.S. Small Business Administration (SBA) charge a rate of up to 15% , a majority of blockchain protocols lend at less than 10%, according to the report and data insights from RWA.xyz.

Businesses are also attracted to tokenized credit as the loan terms and repayments are often transparent, thanks to the inherent properties of blockchains, making them open to public scrutiny. Further, smart contracts automate the process of monitoring stress and recalling loans or collaterals, lowering the overhead costs of the credit facility.

At press time, the RWA.xyz platform indicated that 1,804 loans originated by protocols, cumulatively valued at $581,360,556. The end borrowers for these loans are spread worldwide, from North America to Latin America, Africa, and Asia.

Notably, the consumer industry has the highest outstanding loan, at $197.7 million, followed by Auto, Fintech, and Real Estate at $186.8 million, $105.2 million, and $40 million, respectively. The active loan value in crypto trading is $30.5 million.

Read more about Singapore’s plan for asset tokenization:
Singapore Drives Asset Tokenization Campaign with New Pilots

Stay updated on JPMorgan’s tokenized collateral network:
JPMorgan Debuts Tokenization Network with BlackRock’s Trade