Galaxy Digital Completes First $75M Tokenized Loan on Avalanche

Galaxy Digital has successfully completed its first blockchain-based loan deal worth $75 million on the Avalanche network. This groundbreaking transaction marks a significant advancement in bringing traditional financial instruments onto blockchain infrastructure while expanding institutional access to onchain credit markets.

The financial services company structured this deal as a tokenized collateralized loan obligation (CLO), effectively bridging conventional private credit with blockchain technology. This pioneering move demonstrates how financial institutions now implement distributed ledger technology to improve traditional lending operations while maintaining compliance with regulatory standards.

Avalanche is demonstrating institutional-grade workflows, onchain.

Galaxy’s CLO is a bundle of corporate loans, split into tranches, now issued onchain to streamline settlement & admin.

— Avalanche (@avax) January 15, 2026

Structure and Mechanics of the Blockchain-Based Loan

The deal, formally named Galaxy CLO 2025-1, features a $50 million anchor commitment from Grove, an institutional credit protocol within the Sky ecosystem (formerly known as MakerDAO). The transaction establishes an uncommitted credit facility extended to Arch Lending, a crypto lending platform backed by Galaxy Ventures.

Arch Lending issues consumer loans that maintain overcollateralization with Bitcoin (BTC) and Ether (ETH). This arrangement enables the CLO to purchase these loans as they originate, with capacity to expand to $200 million over time. The senior tranche provides monthly payments with interest rates set at the Secured Overnight Financing Rate (SOFR) plus 5.7% and matures in December 2026.

Galaxy implemented several technological innovations for this transaction. The company’s internal teams handled structuring and blockchain configuration, while Galaxy Asset Management oversees the product. Anchorage Digital Bank serves as trustee and custodian, tracking collateral and settlements in real-time through its blockchain infrastructure. Additionally, Galaxy partnered with Accountable, a specialized data platform that enables continuous monitoring of loan performance and collateral levels for investors.

By uniting our strengths in debt capital markets, blockchain technology, and asset management, we’re opening a new avenue for institutional engagement in credit markets—one that benefits from greater efficiency, transparency, and expanded collateral flexibility through onchain execution.

Chris Ferraro, president and chief investment officer at Galaxy

Implications for Institutional Blockchain Adoption

This transaction represents more than just another loan deal—it signals the increasing maturity of blockchain infrastructure for institutional finance. Traditional financial institutions previously expressed concerns about blockchain technology’s ability to handle complex financial instruments while meeting regulatory requirements. Galaxy’s successful implementation addresses these concerns directly.

The CLO bonds were issued and tokenized by INX and will list on INX’s regulated Alternative Trading System platform operating under Republic. This approach provides qualified investors access to secondary trading within a compliant regulatory environment, further bridging traditional finance with blockchain innovation.

Recent market data supports this trend toward institutional blockchain adoption. Galaxy Research recently predicted that stablecoins could process more transaction volume than the US Automated Clearing House system as early as 2026, noting that stablecoin supply has been growing at 30-40% annually with transaction activity rising accordingly.

Strategic Shift in Galaxy’s Business Focus

This blockchain-based loan initiative aligns with Galaxy Digital’s broader strategic shifts. The company has recently diversified its business activities beyond traditional crypto investments. In October 2025, Galaxy closed a $460 million strategic investment to convert its Helios facility in Texas into an AI-focused data center for CoreWeave, showing its expansion into high-performance computing.

The firm has also reportedly begun testing small-scale liquidity provision on prediction markets like Polymarket and Kalshi, exploring potential market-making opportunities on these platforms. These developments reflect Galaxy’s evolution from primarily a crypto investment firm to a diversified financial services company leveraging blockchain technology across multiple business segments.

Michael Novogratz, founder and CEO of Galaxy Digital, has consistently advocated for institutional blockchain adoption. The successful CLO issuance validates this vision, demonstrating how traditional finance can effectively migrate to blockchain infrastructure while maintaining compliance standards and operational requirements expected by institutional investors.

The Future of Tokenized Credit Markets

Galaxy’s successful execution of this blockchain-based loan opens significant possibilities for the future of credit markets. The transparency, efficiency, and programmable nature of blockchain technology address many limitations of traditional financial infrastructure while creating new opportunities for asset originators and investors alike.

The ability to continuously monitor loan performance and collateral levels represents a substantial improvement over traditional systems where such information typically becomes available only through periodic reporting. Real-time visibility reduces risk for investors while potentially lowering costs for borrowers through improved operational efficiency.

As more institutions follow Galaxy’s lead in bringing private credit onto blockchain infrastructure, we may witness a transformation of capital markets that preserves the best aspects of traditional finance while leveraging the unique capabilities of blockchain technology. Stay connected with Genfinity for more updates on how blockchain continues to reshape the financial landscape for institutions and individuals alike.

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