Tokenization and Private Credit: How Well do Worlds Collide?
An in-depth analysis of how blockchain technology is reshaping the private credit market. The document explains that tokenized debt converts traditional lending into on-chain digital assets, noting that Private Credit is currently the largest real-world asset (RWA) segment moving to this new structure. A key focus is on the value drivers of tokenization, which include improved efficiency and speed in default recovery pathways through automated smart contracts, potentially reducing the need for heavy overcollateralization and leading to lower regulatory capital charges. The report also addresses persistent constraints, such as the need for clearer regulatory frameworks, proven legal enforceability of smart contracts, and overcoming the inherent rigidity of automated contract structures to achieve broader adoption.