Tokenised Debt: The New Frontier for Private Credit

Private credit has been one of the fastest-growing asset classes of the past decade. Tokenisation is about to reshape it again. The ability to represent debt instruments as on-chain tokens is not a theoretical concept. It is being implemented now by institutional players who understand that programmable, fractionalisable, and transferable debt creates structural advantages that traditional instruments cannot match.

A tokenised debt instrument is a digital representation of a loan, bond, or credit facility on a blockchain. The token carries the economic rights of the underlying instrument: principal repayment, interest payments, and any covenants or conditions. Smart contracts automate compliance with those terms, removing the need for manual settlement and reducing counterparty risk.

The key distinction from traditional securitisation is programmability. A tokenised loan can be structured to automatically distribute interest payments to holders, enforce covenant triggers, and update ownership records in real time. This reduces operational overhead and creates a more liquid secondary market for instruments that have historically been illiquid.

Private credit markets are estimated at over USD 1.5 trillion globally. The majority of this capital sits in illiquid, manually administered instruments with high minimum ticket sizes and limited secondary market access. Tokenisation addresses all three constraints simultaneously.

• Fractionalisation reduces minimum investment thresholds, opening private credit to a broader investor base
• Programmable settlement eliminates the operational friction that makes private credit expensive to administer
• On-chain transferability creates a secondary market where none previously existed, improving liquidity and price discovery

Institutional platforms including BlackRock, Franklin Templeton, and Hamilton Lane have already launched tokenised fund products. The infrastructure layer is being built by a cohort of regulated platforms that represent significant M&A targets for financial institutions seeking to acquire rather than build.

The acquisition thesis in tokenised debt infrastructure is straightforward: the platforms that hold regulatory licences, custody infrastructure, and institutional client relationships are the scarce assets. Technology can be built; regulatory approval and client trust cannot be replicated quickly.

Acquirers in this space are primarily traditional financial institutions seeking to accelerate their digital asset capabilities, and blockchain-native platforms seeking to expand into regulated credit markets. The valuation dynamics reflect this strategic scarcity: licensed tokenisation platforms are commanding premiums of 3 to 5 times what comparable fintech businesses would trade at in a standard process.

The due diligence requirements are also more complex. Regulatory status across multiple jurisdictions, smart contract audit history, custody arrangements, and institutional client concentration all require specialist assessment. Acquiry has developed a specific diligence framework for tokenised finance transactions that addresses these requirements systematically.

The regulatory landscape for tokenised debt varies significantly by jurisdiction. Singapore's MAS has published clear guidance under the Payment Services Act. The EU's MiCA framework provides a pathway for tokenised securities across member states. The UK FCA is developing its own regime. The US remains the most complex, with overlapping SEC and CFTC jurisdiction creating uncertainty that has pushed many issuers offshore.

For acquirers, jurisdictional positioning is a material factor in valuation. A platform with MAS or FCA authorisation commands a premium over one operating in a less regulated environment, because the licence represents a genuine barrier to entry that protects the acquired business's competitive position.

Acquiry facilitates buy-side and sell-side mandates across tokenised finance, blockchain infrastructure, and digital asset platforms. If you are evaluating a transaction in this space, speak with our team.

For buyers

• Regulatory licences and custody infrastructure are the scarce assets in this market; acquiring them is faster than building them, which justifies the valuation premium.
• Jurisdictional positioning is a material factor in deal pricing, with MAS or FCA authorisation providing a competitive barrier that protects the acquired business.
• Due diligence must cover smart contract audit history, multi-jurisdictional regulatory status, and institutional client concentration, requiring specialist assessment beyond standard fintech processes.

For sellers

• Platforms holding regulatory licences and established institutional client relationships are positioned as strategic assets commanding significant premiums over standard fintech comparables.
• The primary acquirer pool includes traditional financial institutions accelerating digital asset capabilities and blockchain-native platforms expanding into regulated credit markets, broadening the potential buyer universe.

Acquiry runs buy-side and sell-side mandates for digital businesses. We are not limited to the sectors or markets covered here: any sector, any market, bring it to us anyway. Start a mandate (opens in a new tab).