First Abu Dhabi Bank (FAB), a $335 billion banking giant, will manage liquidity through credit lines backed by Libre’s tokenized assets.
By Bena Ilyas
Edited by Julia Sakovich
Updated
3 mins read
First Abu Dhabi Bank (FAB) has signed a Memorandum of Understanding (MoU) with Libre Capital, a leading tokenization specialist. The collaboration aims to transform collateralized lending by using real-world asset (RWA) tokens as collateral. Libre Capital is backed by financial giants like Brevan Howard’s WebN Group and Nomura’s Laser Digital.
Libre, which launched in March and has issued about $150 million worth of tokenized assets, brings together high-value offerings such as Brevan Howard funds, Hamilton Lane’s fixed-income products, and a BlackRock money-market fund. The MoU sets the stage for FAB to pilot a credit line for stablecoin lending secured by these tokenized assets.
The concept of using tokens as collateral isn’t new to the crypto era, but this initiative introduces a substantial player into the space. FAB, a $335 billion banking giant, will manage liquidity through credit lines backed by Libre’s assets. The assets will operate across public blockchain platforms like Ethereum, Solana, Polygon, Coinbase’s layer-2 network, NEAR, Aptos, and BASE.
Libre’s initiative, branded as “Project HODL” (High-Yield Optimized Decentralized Liquidity), aims to expand the utility of RWAs by enabling their use as collateral. Dr. Avtar Sehra, Libre’s founder and CEO, shared his vision in an interview, saying:
“Essentially it’s an on-chain infrastructure that allows these RWAs to be used as collateral. The lending is all in stablecoins, not in fiat, and is being provided through existing lenders, like broker dealers, or Laser Digital, and now they are getting credit lines from providers like FAB.”
The collaboration emphasizes stablecoins over traditional fiat currencies, creating a fully on-chain lending process. By partnering with FAB, Libre ensures access to significant credit lines, bridging the gap between decentralized finance and conventional banking.
Sameh Al Qubaisi, FAB’s group head of global markets, highlighted the bank’s dedication to innovation. At the MoU signing in the UAE, he stated:
“Through this initiative, FAB aims to enable secure credit facilities backed by tokenized assets, with automated processes ensuring robust risk management and complete regulatory compliance.”
Libre aims to meet market demands, not just advance technology. The firm suggested using high-grade RWA tokens as collateral on MakerDAO’s forum in September, showing its ambition for wider acceptance. The involvement of First Abu Dhabi Bank (FAB) lends credibility, supporting broader financial integration.
The partnership merges tokenized RWAs with traditional credit, setting a precedent for blockchain finance’s future. This step signals the increasing acceptance of decentralized technologies in mainstream banking. Emphasis on compliance, automation, and innovation may lead to similar projects across the financial sector.
Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.
With over 3 years of crypto writing experience, Bena strives to make crypto, blockchain, Web3, and fintech accessible to all. Beyond cryptocurrencies, Bena also enjoys reading books in her spare time.
