Structured credit has long been the backbone of global fixed-income markets, enabling institutions to efficiently finance lending activities. Yet, in crypto, institutional-grade credit remains largely untapped—until now.
Today, FalconX is pioneering a new frontier with the first-ever institutional Structured Credit Facility (SCF) structured and tokenized on-chain. This facility transforms institutional lending by packaging FalconX-originated loans into a structured product that investors can now access through a private credit vault. This isn’t just another Real World Asset (RWA) experiment—it’s a fully operational, blockchain-powered version of a well-known financial structure.
Why This Matters: Bringing Structured Credit On-Chain
The fixed-income market, valued at $140.7 trillion in 2023, is one of the largest and most mature financial sectors in the world. Yet, despite crypto’s rapid growth to a market capitalization of $3 trillion today, crypto credit markets remain fragmented, making access to capital significantly more expensive than in traditional markets. With FalconX’s loan originations reaching $2.5 billion in 2024 and projected to grow exponentially in 2025, the demand for scalable, institutional-grade crypto credit solutions has never been greater.
To meet this need, FalconX is launching the first on-chain SCF backed by our institutional lending portfolio, marking a major step in bringing structured credit to digital assets. While RWA tokenization has largely focused on digitizing existing securities, this facility creates an entirely new structured credit product that enables institutional capital formation directly in crypto markets. By leveraging blockchain technology, we are transforming institutional credit markets and unlocking more efficient, transparent, and scalable capital flows.
Institutional-Grade Credit, Now On-Chain
At the core of this innovation is FalconX’s structured credit facility, made accessible on-chain through our partners M11 Credit and Pareto. This approach combines the rigor of fixed-income markets with the efficiency of DeFi.
FalconX originates institutional loans, packages them into a structured product that institutional investors can access through a private credit vault launched by Pareto, a DeFi protocol specialized in on-chain credit markets. M11 Credit, the credit investment arm of digital asset investment firm Maven 11, serves as the vault curator, ensuring institutional-grade oversight.
Through this facility, institutional investors gain exposure to crypto credit markets through a familiar fixed-income framework, while blockchain technology streamlines settlement, simplifies reconciliation, and provides real-time visibility into every transaction. This significantly improves transparency and reduces operational overhead. As demand for structured credit grows, this facility establishes a new model for efficient and scalable capital formation in digital assets.
Risk Management at the Core
Institutional-grade risk management is central to this facility. FalconX employs a multi-layered risk framework with real-time collateral monitoring, automated margin calls, and the industry's first cross-exchange liquidation engine designed to safeguard institutional credit. Loans are overcollateralized, with assets held securely within the FalconX ecosystem to minimize counterparty risk. Our risk assessments incorporate portfolio simulations across historical market scenarios to evaluate key exchange risks, while rigorous underwriting and credit tiering strengthen borrower due diligence. By combining institutional safeguards with on-chain transparency, FalconX puts security and risk management at the core of digital asset lending.
The Next Phase of Institutional Credit in Crypto
With structured credit now live on-chain, FalconX and its partners, M11 Credit and Pareto, are redefining how institutional lending is structured and accessed in digital markets. This launch builds on FalconX’s earlier integration of BlackRock’s BUIDL product, as well as Superstate’s short-term treasury fund (USTB), as trading collateral, further embedding institutional finance within digital asset markets.
By structuring private credit into an investable on-chain product, FalconX is expanding institutional credit markets, enhancing liquidity, and paving the way for a more accessible and efficient private credit ecosystem.
To learn more about this tokenized SCF, visit the Credit Vault on Pareto.
Investment Disclaimer
This document is for informational purposes only and does not constitute an offer to sell or a solicitation of an offer to buy any financial instruments. The information contained herein is not intended as investment advice and should not be relied upon as such. Potential investors should conduct their own due diligence and consult with their financial advisors before making any investment decisions.
Investing in digital assets involves significant risk, including the risk of loss of principal. The value of investments can go down as well as up, and investors may not get back the amount originally invested. Past performance is not indicative of future results.
The regulatory environment for digital assets is evolving, and changes in laws or regulations could adversely affect the value and legality of digital asset investments. Investors should be aware of the legal and tax implications of investing in digital assets and seek professional advice if necessary.
FalconX makes no representations or warranties regarding the accuracy or completeness of the information contained in this document. All opinions, projections, forecasts, and estimates are subject to change without notice.
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