Galaxy Digital closed a $75 million tokenized CLO (collateralized loan obligation) on the Avalanche blockchain in January 2026. The transaction involved the issuance of tradable digital securities tied to a portfolio of loans. The structure uses blockchain technology instead of traditional finance systems.
The tokenized CLO was issued through Galaxy Digital’s blockchain finance division. The digital notes are represented as tokens on Avalanche’s smart contract network. Holders can trade the tokens on supported platforms. Galaxy Digital said the structure improves settlement speed and transparency.
Avalanche is a layer-1 blockchain known for high throughput and low fees compared with some other networks. The network supports the creation of digital assets and structured financial products like tokenized securities. The Avalanche token (AVAX) is used for transaction fees on the chain.
Galaxy Digital worked with partners to design the tokenized CLO. The process involved legal, technical, and compliance teams. The goal was to match traditional CLO economics with blockchain delivery and ownership. The loans underlying the structure were originated outside of blockchain, then brought on chain via tokenization.
The CLO’s $75 million principal was divided into tranches with different risk and return profiles. Senior notes typically carry lower risk and lower yield. Mezzanine or junior notes carry higher risk and potentially higher return. Investors selected tranches based on their risk preference.
Token holders receive scheduled payments based on cash flows from the underlying loan portfolio. Payments to investors are programmed through smart contracts, reducing the need for manual reconciliation. The tokenized structure also automates interest distribution according to tranche terms.
Galaxy Digital said the transaction marked another step in blending traditional finance products with decentralized infrastructure. The firm has pursued multiple tokenization projects involving assets such as credit instruments, structured products, and yield-bearing collateral.
The transaction required regulatory and compliance review. Digital securities must meet legal standards in jurisdictions where they are sold. Galaxy said it worked with legal advisors to ensure compliance with securities and financial laws.
The tokenized CLO is available to qualified institutional investors. It is designed to appeal to entities comfortable with both structured credit and blockchain settlement. The issuance may support secondary market trading via digital asset platforms that list tokenized securities.
Galaxy Digital’s initiative adds to a growing number of blockchain-based financial products. Tokenized loans, bonds, and other securities are increasingly hosted on smart contract networks for improved efficiency. The $75 million Avalanche CLO is one of the larger structured finance deals in decentralized markets.
Investors will monitor performance as interest payments are generated and distributed. The success of the tokenized CLO may influence future issuance of digital structured products. The transaction demonstrates a continued shift toward digital representations of traditional financial instruments.
Source: https://cointelegraph.com/news/galaxy-digital-closes-75m-tokenized-clo-on-avalanche
