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- Flow Capital moves private credit fund onchain as tokenization gains traction
- Institutional players expand blockchain adoption through tokenized financial products and funds
- Analysts warn liquidity risks persist despite growing real world asset tokenization
Flow Capital is also venturing further into blockchain-based finance since it is set to turn a private credit fund into a digital one. The Hong Kong-based asset manager intends to onchain its $150 million vehicle with DigiFT, which is an indication of a wider change in the approach to delivering traditional assets to investors.
According to Bloomberg, the company will have the transition complete by the close of this month. It also plans to raise an extra $30 million in tokenized shares later this year. This practice is indicative of increased attention to blockchain distribution channels in institutional finance.
Besides, Flow Capital introduced the fund in June 2025 as a part of its private credit strategy. Now, it seeks to expand access by using tokenization infrastructure. Jacky Tian, the chief investment officer, stated that the company is aiming to reach a size of $250 million by 2026.
In addition to the increased access, the shift underscores the way companies strive to digitalize the old investment frameworks. Fractional ownership is possible through tokenization and this could appeal to a wider group of investors. As a result, the customary barriers associated with the entry requirements can be eroded over time.
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Tokenization Growth Signals Institutional Shift
In the meantime, the wider real-world asset market has been experiencing a swift growth in the last one year. Statistics indicate that the overall market capitalization amounted to $58 billion by mid-April. This is a considerable improvement on the previous year when they were at $21.5 billion.
The segment increased to $19.3 billion on Ethereum alone, representing a more than 200 percent year-over-year growth. This growth is a sign of a long-lasting institutional need in the blockchain-based financial products.
Moreover, the large financial actors are already in this arena through such initiatives. BlackRock launched the tokenization of its Treasury fund, which became popular as a digital money market fund. JPMorgan also has introduced an Ethereum-based tokenized fund, which was initially seeded with $100 million.
Liquidity Risks Remain a Key Concern
Nonetheless, other analysts are still wary of the long-term outlook of this trend. Nic Puckrin of Coin Bureau opines that the distribution is enhanced by tokenization but does not address the liquidity risks completely. He elaborated that immediate settlement would give an illusion of liquidity without addressing liquidity limitations. Even when the demand of redemption increases very high, structural weaknesses can still be realised.
Moreover, these issues bring out one of the main problems of tokenized credit markets. Accessibility is enhanced, but behavior of underlying assets is not affected. Consequently, technological changes might not be able to overcome liquidity imbalances. In conclusion, Flow Capital’s move reflects a growing institutional push toward blockchain-based finance. Simultaneously, it highlights the trade off between innovation and structural risk in changing markets.
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