Recent Developments in Automated Lending
First Abu Dhabi Bank (FAB) has officially entered into a Memorandum of Understanding (MoU) with Libre Capital, a leading firm in tokenization supported by Brevan Howard's WebN Group and Nomura's Laser Digital. This partnership is set to launch blockchain-based collateralized lending utilizing Real World Asset (RWA) tokens.
Since its inception in March, Libre has successfully issued around $150 million worth of tokenized versions of Brevan Howard funds, fixed-income products from Hamilton Lane, and money-market funds from BlackRock. The newly formed MoU enables FAB to pilot a credit line where approved lenders can engage in stablecoin lending backed by these tokens.
Crypto asset holders can leverage their tokens to secure loans efficiently. Libre has previously sought to use its top-tier RWA tokens for collateralization in discussions on a MakerDAO forum last September, now integrating FAB, managing liquidity through lending credit lines on assets across public blockchains such as Ethereum and Solana.
Libre's program for collateralized lending is part of an initiative termed Project HODL (High-Yield Optimized Decentralized Liquidity).
Dr. Avtar Sehra, Founder and CEO of Libre, stated: "We’ve been working on adding utility to our AUM in the form of collateralized lending. Essentially, it’s an on-chain infrastructure that allows these RWAs to be used as collateral. The lending is all in stablecoins, not in fiat, and is being provided through existing lenders, like broker-dealers, or Laser Digital, and now they are receiving credit lines from providers like FAB."
At the MoU's signing in the UAE, Sameh Al Qubaisi expressed that this initiative reflects FAB's commitment to advancing innovation in the finance sector. Al Qubaisi said, "Through this initiative, FAB aims to enable secure credit facilities backed by tokenized assets, with automated processes ensuring robust risk management and complete regulatory compliance."
Stay tuned for more insights from CoinDesk as this collaboration unfolds.
