First Abu Dhabi Bank Signs MoU with Libre Capital for RWA Lending
First Abu Dhabi Bank (FAB) has signed a Memorandum of Understanding (MoU) with Libre Capital, a tokenization specialist. This collaboration aims to enhance collateralized lending by utilizing real-world asset (RWA) tokens as collateral. Libre Capital is supported by financial institutions including Brevan Howard’s WebN Group and Nomura’s Laser Digital.
Since its launch in March, Libre has issued around $150 million in tokenized assets, including offerings from Brevan Howard, Hamilton Lane's fixed-income products, and a BlackRock money-market fund. The MoU enables FAB to pilot a credit line for stablecoin lending secured by these tokenized assets.
While the concept of using tokens as collateral is established in the crypto space, this initiative introduces a major player. FAB, valued at $335 billion, will manage liquidity via credit lines backed by Libre’s assets, which will function on public blockchain platforms such as Ethereum, Solana, Polygon, Coinbase’s layer-2 network, NEAR, Aptos, and BASE.
Project HODL Bridges DeFi and Banking
Libre’s “Project HODL” (High-Yield Optimized Decentralized Liquidity) seeks to enhance the utility of RWAs by allowing their use as collateral. Dr. Avtar Sehra, Libre’s founder and CEO, explained:
“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.”
This partnership promotes stablecoins over traditional fiat currencies, establishing a fully on-chain lending system. By collaborating with FAB, Libre gains access to substantial credit lines, bridging decentralized finance and traditional banking.
Sameh Al Qubaisi, FAB’s group head of global markets, emphasized the bank’s commitment to innovation during the MoU signing in the UAE:
“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.”
Tokenized RWAs Meet Traditional Credit
Libre aims to address market needs while advancing technology. In September, the firm proposed using high-grade RWA tokens as collateral on MakerDAO's forum, reflecting its ambition for broader acceptance. The involvement of FAB enhances credibility, supporting greater financial integration.
The partnership integrates tokenized RWAs with traditional credit, setting a precedent for the future of blockchain finance. This development indicates growing acceptance of decentralized technologies in mainstream banking, with a focus on compliance, automation, and innovation, potentially inspiring similar initiatives across the financial sector.