Financial tech provider FIS and structured finance platform Intain are rolling out a blockchain-based marketplace built on that allows regional and community banks to securitize and sell loan portfolios directly to institutional investors, the firms told CoinDesk.
Digital Liquidity Gateway, as it is dubbed, tokenizes loans as non-fungible tokens (NFTs), automates settlement including with stablecoins like USDC, and removes layers of intermediaries that often make asset-backed finance slow and costly. It’s integrated with FIS’s core banking systems that provide software and payment infrastructure to more than 20,000 clients worldwide.
The platform is already onboarding banks and investors, with hundreds of millions of dollars in loan transactions expected by the end of the year starting with loan pools tied to commercial real estate and aviation finance, the companies said.
The initiative fits into a broader shift as asset managers, banks and fintechs place assets onto blockchain rails in a process called tokenization of real-world assets (RWA). While many of those efforts focus on large institutions, Intain and FIS are aiming at the long tail of community and regional banks that fund much of local small business lending but rarely reach securitization markets.
“These small banks are remote from most capital markets flows,” John Omahen, head of digital assets at FIS, said in an interview. “They originate loans and sit on them. They don’t have the expertise to structure deals or reach investors. What we’re doing is creating a place where those assets can meet demand, and capital can move more efficiently.”
Loan tokenization to increase transparency
Recent failures and controversies, including those at auto lender Tricolor and car parts manufacturer First Brands, have highlighted how weak data controls and opaque loan tracking can lead to double-pledging, mispricing and investor losses.
Digital Liquidity Gateway’s key feature is loan tokenization, where each loan is converted into a non-fungible token (NFT), backed by loan documents, data from FIS systems, and third-party verification. Intain’s AI engine reconciles documents and ensures data accuracy before minting the NFT, which then becomes traceable and tamper-resistant.
“Suddenly, what was an off-chain asset, untraceable, is now onchain,” Siddhartha, CEO of Intain, said in an interview. “That means if I’m an investor in a tokenized asset-backed security, I can zoom in and see the hundreds of individual loans that back it, with the assurance that they’re recorded onchain and can’t be double pledged.”
The platform underlines how traditional finance (TradFi) institutions can lean into blockchain to streamline operations and open up new markets. For regional banks, this could mean faster access to liquidity, less paperwork and more capacity to lend in local communities.
“Asset-backed finance is about capital flows,” Omahen said. “This platform helps banks unlock balance sheet capacity so they can make more loans and serve their communities better.”
Read more: Japan’s $2T Payment Provider TIS Rolls Out Multi-Token Platform With Avalanche