WisdomTree has unveiled a tokenized investment vehicle to bring private credit directly onto blockchain rails.
The WisdomTree Private Credit and Alternative Income Digital Fund (CRDT) launched Sept. 12 on Ethereum and Stellar blockchains. It will be available to investors through the company’s Prime and Connect platforms.
WisdomTree Puts $1 Trillion Private Credit Market on Ethereum and Stellar for $25
Global financial firm WisdomTree rolled out its Private Credit and Alternative Income Digital Fund (CRDT), tapping into the accelerating trend of tokenizing private credit and other real-world assets.
The WisdomTree Private Credit and Alternative Income Digital Fund went live on Friday, offering exposure to an equal-weighted index spanning 35 closed-end funds, business development companies, and real estate investment trusts (REITs). This benchmark isn’t new for the firm; it’s been running an ETF since 2021.
WisdomTree Aims to Give Investors Private Credit Opportunities
CRDT broadens private credit participation by allowing retail and institutional investors to invest. The fund hopes to give crypto-native investors a simple and transparent way to tap into private credit opportunities.
So far, the fund’s tokenized format allows participation starting at $25 and provides redemptions within two days. While its index-based approach offers affordable and liquid access to private credit, it does not provide direct ownership of the underlying loans.
Will Peck, Head of Digital Assets at WisdomTree, commented on the tokenized vehicle, saying it brings alternative assets directly to the blockchain and will give crypto-native investors the same diversification opportunities that institutions enjoy. He further noted, “For us, it’s marrying what we think is a great exposure to private credit in a vehicle that works for the DeFi community.”
Jeremy Schwartz, Global Chief Investment Officer at WisdomTree, also remarked, “For four years, we’ve been proud to make this space more accessible to the individual investor through our ETF, and now CRDT is able to deliver yield potential in a modern, tokenized fund.”
CRDT is now part of WisdomTree’s dozen-strong lineup of tokenized funds, which collectively hold nearly $900 million, mostly from institutional clients. The fund will initially be available on Ethereum and Stellar, with support for other blockchains, including Avalanche, expected soon.
The Tokenized Market is Slowly Growing, with Firms Like BlackRock Taking the Initiative
Industry data from rwa.xyz puts the tokenized market at around $29 billion, a small number compared to trillions in mutual funds and ETFs. Some analysts, such as those at JPMorgan, have minimized its amplitude by pointing to fragmented rule-making and questions of the legal status of blockchain contracts. Others are comparing the current tokenized market to ETFs’ early days before they took off.
However, BlackRock’s $2 billion tokenized money market fund has started strongly, and Fidelity and VanEck are piloting on-chain Treasury services. Bloomberg reported that BlackRock is also working on methods for issuing ETFs as blockchain tokens, which would be tied to funds with real-world assets like stocks.
Janus Henderson Group has followed suit, tokenizing its flagship credit strategy. In July, Goldman Sachs and BNY Mellon introduced their own tokenized money-market fund offerings to institutional clients.
Additionally, in August, State Street joined BlackRock and Vanguard in the asset-management elite and became the first custodian for JPMorgan’s blockchain-based debt platform.
State Street made the platform’s first deal, buying $100 million worth of tokenized commercial debt from OCBC, one of Southeast Asia’s oldest banks. Then again, in September, Chainlink, UBS, and DigiFT teamed up in Hong Kong to pilot tokenized fund settlement.
Jeremy Schwartz, Global Chief Investment Officer at WisdomTree, said:
““Private credit has become one of the most talked-about opportunities in today’s market. For four years, we’ve been proud to make this space more accessible to the individual investor through our ETF, and now CRDT is able to deliver yield potential in a modern, tokenized fund.”
In other news, the world’s largest asset manager BlackRock (NYSE: BLK) is planning to tokenize exchange-traded funds (ETFs) following the success of its Bitcoin ETF, Bloomberg reported on Sep. 11.
Sources familiar with the matter told the publication that the Wall Street giant is exploring ways to make ETFs available as tokens on a blockchain. The firm is working toward tokenizing ETFs tied to real-world assets (RWAs) like stocks.
