Galaxy Digital Closes $75 Million Tokenized CLO on Avalanche
Galaxy Digital has closed the first tokenized Collateralized Loan Obligation (CLO), bringing private credit on blockchain infrastructure.
The deal, known as Galaxy CLO 2025-1, was awarded to Avalanche and has financed nearly $75 million in loans to date, according to Thursday's announcement. The transaction was backed by a $50 million allocation from Grove, an institutional lending protocol in the Sky ecosystem formerly known as MakerDAO.
“By combining our strengths in debt capital markets, blockchain technology and asset management, we are opening a new way for institutional participation in the credit markets—one that benefits from greater efficiency, transparency and enhanced collateral exchange through onchain execution,” said Chris Ferraro, Galaxy's president and chief investment officer.
Galaxy said the CLO was designed to support its lending operations through an unsecured credit facility extended to Arch Lending, which is backed by Galaxy Ventures. Ark offers customer loans backed by Bitcoin (BTC) and Ether (ETH). The money from the CLO will be used to buy these loans as they are created, the program could grow to $200 million over time.
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Galaxy token CLO for trading on the INX platform
Crypto trading platform INX issues CLO bonds and places them on the blockchain. The tokens are expected to be listed on the INX platform for authorized investors. The most secured portion of the CLO pays interest at a rate equal to the expected overnight financing rate, or SOFR, of 5.7%, maturing in December 2026 and making monthly payments.
Galaxy's internal teams handled the architecture and organization of the blockchain, while Galaxy Asset Management handled the production.
Anchorage Digital Bank acts as a trustee and custodian, tracking securities and settlements in real-time using blockchain infrastructure. In addition, Galaxy, in partnership with Accounting, is a data platform that allows investors to continuously monitor loan performance and underwrite CLOs.
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Stablecoins to overtake ACH payments by 2026: Galaxy
In a recent report, Galaxy Research, the research arm of Galaxy Digital, predicted that by 2026 it could handle more transaction volume than the US's automated clearinghouse system.
According to Galaxy, the stablecoin supply is growing at a rate of 30%-40% annually, with transaction activity increasing alongside the product.
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