Galaxy Digital has closed its first tokenized collateralized loan obligation (CLO), bringing private credit to blockchain infrastructure.
The deal, known as Galaxy CLO 2025-1, was completed on Avalanche and has so far funded approximately $75 million in loans, according to an announcement Thursday. The transaction is anchored by a $50 million allocation from Grove, an institutional lending protocol within the Sky ecosystem, formerly known as MakerDAO.
“By joining forces in debt capital markets, blockchain technology and asset management, we are forging a new path for institutional engagement in credit markets, one that benefits from greater efficiency, transparency and increased collateral flexibility through on-chain execution,” said Chris Ferraro, President and Chief Investment Officer at Galaxy.
Galaxy said the CLO is designed to support its lending operations through an uncommitted credit facility extended to Arch Lending, a crypto lending platform backed by Galaxy Ventures. Arch issues over-collateralized consumer loans with Bitcoin (BTC) and Ether (ETH). Money from the CLO is used to purchase these loans as they are created, with the program growing to $200 million over time.
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Tokenized Galaxy CLO will be traded on the INX platform
Crypto trading platform INX issued the CLO bonds and placed them on the blockchain. The tokens are expected to be listed on the INX platform for approved investors. The more secure portion of the CLO pays interest at a rate tied to the guaranteed overnight financing rate, or SOFR, plus 5.7%, matures in December 2026 and makes monthly payments, according to the announcement.
Galaxy’s internal teams managed the structuring and configuration of the blockchain, while Galaxy Asset Management oversees the product.
Anchorage Digital Bank acts as a trustee and custodian, tracking collateral and settlements in real time using its blockchain infrastructure. Galaxy has also partnered with Accountable, a data platform that allows investors to continuously monitor loan performance and collateral backing the CLO.
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Stablecoins will overtake ACH payments in 2026: Galaxy
In a recent report, Galaxy Research, the research arm of Galaxy Digital, predicted that stablecoins could handle more transaction volume than the U.S. automated clearing house system as soon as 2026. The company noted that stablecoins already process more transactions than major card networks like Visa and now account for about half of ACH transaction volume.
Galaxy said the supply of stablecoins has been growing at an annual rate of 30-40%, with transaction activity increasing alongside issuance.
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