• FAB and Libre Capital signed a MoU to provide tokenized collateralized lending.
• Libre has issued $150 million of tokenized versions of Brevan Howard funds.
• FAB will handle liquidity through lending credit lines on Libre’s assets.

Blockchain and cryptocurrency adoption hit a new milestone as UAE’s First Abu Dhabi Bank (FAB) partnered with Libre Capital for blockchain-based collateralized lending. The two signed a Memorandum of Understanding (MoU) to collaborate on leveraging real-world asset (RWA) tokens for secured credit lines.

Libre Capital, backed by Brevan Howard’s WebN Group and Nomura’s Laser Digital, has already issued $150 million in tokenized assets since its launch in March. FAB plans to pilot a credit line that enables approved lenders to offer stablecoin loans secured by Libre’s RWA tokens.

Libre launched in March and in the past eight months, have issued $150 million in tokenized versions of Brevan Howard funds, Hamilton Lane’s fixed-income products, and a BlackRock money-market fund. FAB will pilot a credit line that lets approved lenders provide stablecoin loans with Libre’s tokens as collateral.

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This new arrangement will let crypto asset holders use their tokens as collateral to borrow funds. Libre attracted this mainstream bank (valued at $335 billion) after proposing its blue-chip RWA tokens as collateral on a MakerDAO forum in September.

In the meantime, FAB will manage liquidity by lending credit lines on Libre’s assets. Libre’s proposal states that the assets will be on public chains like Ethereum, Polygon, Solana, NEAR, Aptos, and Coinbase’s layer-2 network BASE. This will help Libre achieve its “Project HODL” initiative.

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Libre’s founder and CEO, Dr. Avtar Sehra, highlighted the project’s goal of adding utility to its Assets Under Management (AUM) through collateralized lending. Sehra explained that the lending will be in stablecoins provided by existing lenders like broker-dealers or Laser Digital. The change is that these lenders will now get credit lines from providers like FAB.

FAB’s group head of global markets, Sameh Al Qubaisi, noted that Libre’s initiative underscores the bank’s commitment to drive innovation in the UAE. According to Al Qubaisi, FAB would use the partnership to implement secure credit facilities backed by tokenized assets. He cited implementing automated processes to ensure robust risk management and complete regulatory compliance.