Galaxy Digital (Nasdaq: GLXY) has closed its first tokenized collateralized loan obligation (CLO), the crypto asset manager announced on Jan. 15.
The $75 million CLO has been issued on the Avalanche blockchain network.
An allocation of $50 million from Grove, an institutional credit protocol within the Sky ecosystem, anchored the transaction.
Related: JPMorgan to let clients use spot Bitcoin ETFs as loan collateral
The asset manager stated that the CLO provides funding for an uncommitted credit facility to Arch Lending. It is a crypto lending platform backed by Galaxy Ventures that offers consumer loans overcollateralized with cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH).
The proceeds from the CLO have been utilized to purchase outstanding loans under the Arch credit facility, with roughly $75 million financed so far and the potential to expand up to $200 million when new loans are originated.
The debt tranches of the CLO were issued and tokenized on Avalanche by INX to ensure economical and efficient trading.
The tokens are expected to be listed on INX's ATS platform, a wholly owned subsidiary of Republic.
The CLO includes a senior coupon of SOFR +570 bps, with a stated initial maturity in December 2026.
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Galaxy said that it decided to tokenize the CLO to bring private credit on-chain, unlock the potential for instant settlement, improve secondary-market liquidity, and increase collateral efficiency.
Galaxy president and chief investment officer Chris Ferraro said,
"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 on-chain execution."
Grove Labs co-founder Sam Paderewski said the deal represented another significant advancement for on-chain credit, showing that traditional securitization structures could be implemented on-chain without sacrificing institutional standards.
Galaxy's Lending and Digital Infrastructure teams structured and tokenized the CLO.
Galaxy Asset Management is issuing and managing the CLO.
Anchorage Digital Bank is the bond trustee and qualified custodian. NAV Consulting, Inc. will offer fund administration services for the product.
Following the announcement, Galaxy Digital's stock rose more than 7% and was trading at $30.30 at the time of writing.
Related: Galaxy Digital Latest to File for a Bitcoin ETF
This story was originally published by TheStreet on Jan 15, 2026, where it first appeared in the Innovation section. Add TheStreet as a Preferred Source by clicking here.
