The UAE’s First Abu Dhabi Bank (FAB) has partnered with Libre Capital to advance blockchain-based lending using real-world asset (RWA) tokens.
Through a recently signed Memorandum of Understanding (MoU), the collaboration aims to facilitate collateralized credit lines, where lenders can offer loans backed by RWA tokens issued by Libre. Libre Capital, which was launched in March with support from Brevan Howard’s WebN Group and Nomura’s Laser Digital, has already tokenized $150 million worth of assets, including fixed-income products from Hamilton Lane and a BlackRock money-market fund. The partnership with FAB will focus on testing a new credit line system that allows stablecoins to be borrowed using Libre’s tokenized assets as collateral.
This move is a significant step towards integrating traditional finance with blockchain technology, enabling cryptocurrency holders to use their tokens as collateral for loans. Libre’s blue-chip RWA tokens gained attention after being proposed as collateral in a MakerDAO forum. As part of the agreement, FAB will manage the liquidity of these assets and provide credit lines to lenders, utilizing public blockchains like Ethereum, Polygon, and Solana for the transactions.
Libre’s CEO, Dr. Avtar Sehra, emphasized that this initiative would enhance the value of their assets by introducing a lending dimension. The loans will be made in stablecoins and managed by institutions like FAB, marking a shift towards secure, tokenized financial systems. Sameh Al Qubaisi, FAB’s global markets head, highlighted that this partnership is part of the bank’s broader strategy to promote financial innovation in the UAE, with a focus on secure and compliant lending practices.