The private credit market is witnessing a transformation as blockchain technology enables tokenization at an unprecedented pace. Provenance Blockchain Labs, led by CEO Anthony Moro, is driving this shift by facilitating the tokenization of home equity lines of credit (HELOCs).
According to Moro, approximately 15% of HELOC transactions are now on blockchain, amounting to $650 million monthly.
These developments were highlighted during a panel discussion at Benzinga's Future of Digital Assets event, where experts discussed blockchain’s current and future applications in financial services.
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Breaking Down the HELOC Tokenization Process
Moro explained that tokenization offers significant efficiencies in processing HELOCs, reducing costs and improving speed. He noted that the savings stem from blockchain's ability to streamline back-office tasks such as audits and time-to-market operations.
“When you save 100 basis points off the origination process, digitally native origination to warehouse to securitization, you're doing things better than your competitors—and soon, you won't have many competitors,” Moro said during the panel. The success of HELOC tokenization has positioned Provenance Blockchain Labs as a leader in the field. Moro also indicated that other markets, including mortgages, are expected to follow this trajectory, though regulatory hurdles remain challenging.
Institutional Perspectives on Blockchain Adoption
The discussion also brought insights from leading financial institutions such as Société Générale and Citi. Thomas Sullivan, managing director at Société Générale, pointed out that their SG Forge subsidiary has issued a euro-denominated stablecoin on Ethereum, compliant with the European Union's Markets in Crypto-Assets (MiCA) regulation.
“It's permissionless, transferable, and MiCA-compliant,” Sullivan said, adding that this approach positions Société Générale as a pioneer in digital assets. Meanwhile, Citi’s Ioana Niculcea shared updates on the bank's Citi Digital Cash solution, which enables tokenized inter-branch deposits. Now operational between the U.S. and Singapore, the program is part of Citi's broader efforts to integrate blockchain into traditional banking.
“Our Citi Digital Cash solution is live and commercial, pushing us toward scale in digital assets,” Niculcea noted.
Challenges and Opportunities
Despite progress, panelists acknowledged that regulatory constraints, especially in the U.S., pose challenges to scaling tokenization. Moro pointed out that the SEC has yet to approve blockchain as a "source of truth" for transfer agents, a barrier that could limit broader adoption.
“Technology always moves faster than regulation, but for the U.S. to lead in this space, we need legislation to catch up,” Moro said. Sullivan echoed this sentiment, emphasizing the need for collaboration between blockchain developers and traditional financial institutions to align technical advancements with real-world applications.
The Path Forward
As tokenization continues to reshape financial markets, panelists agreed that collaboration and regulatory clarity will be crucial. Integrating blockchain technology into private credit markets marks a major step forward, showing how other asset classes might follow suit.
The Benzinga event showcased blockchain’s potential to revolutionize finance while highlighting the remaining roadblocks. For institutions and innovators alike, the focus is now on scaling these solutions to unlock broader applications.
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