SemiLiquid Launches Programmable Credit Protocol: A New Era for Digital Asset Lending
Announced at Abu Dhabi Finance Week 2025, the protocol gives institutions a simple way to borrow against tokenized assets without the usual friction.
Imagine you own company shares and need a loan. In traditional markets, you can pledge those shares as collateral while the bank holds them for security. You still collect dividends and you do not need to move the shares anywhere. The process works because the infrastructure already exists.
Doing the same thing with digital or tokenized assets is much harder. Borrowers deal with complex paperwork, asset transfers across systems, bespoke legal agreements, and long delays. Blockchain was meant to streamline this, yet institutional lending against digital assets has remained stuck in a slow and fragmented process.
That changes today. SemiLiquid has introduced its Programmable Credit Protocol at Abu Dhabi Finance Week 2025, providing institutions with a simpler and more reliable way to access credit using their digital holdings.
The Problem This Solves
Tokenized assets are projected to exceed ten trillion dollars by 2030. Despite this growth, institutional lending has been inefficient. Most deals still require custom agreements, manual transfers, and heavy legal involvement. Each transaction becomes a unique project, which slows adoption and increases risk.
This is the exact type of problem blockchain technology should be able to solve.
What Makes This Launch Important
SemiLiquid’s Programmable Credit Protocol allows institutions to borrow against digital assets without moving them out of custody. Assets stay in secure, regulated vaults. Lenders receive automated and enforceable rights if borrowers default. The process removes manual steps and removes the need for trust between participants.
Smart contracts handle the credit rules. They define how much can be borrowed, what happens if collateral values change, and when repayments occur. Everything is automated and transparent.
Proven Through a Major Pilot
The launch follows a successful pilot with Franklin Templeton, Zodia Custody, Avalanche, and law firm CMS. In the trial, Franklin Templeton’s tokenized money market fund BENJI was used as collateral. The fund stayed in custody and continued generating daily returns for the borrower. Lenders received automatic protection, and every part of the process was executed without asset transfers or repeated legal work.
The protocol integrates with regulated custody providers and includes an enforceable legal framework created with CMS. This combination addresses one of the largest barriers to institutional participation.
Why It Matters for Global Finance
Large institutions such as pension funds, insurers, and endowments need predictable and compliant infrastructure before they can operate at scale in digital markets. Until now, lending and borrowing against tokenized assets has not met their standards.
SemiLiquid’s launch changes the calculation. It brings custody native credit infrastructure with clear legal support, automated execution, and compatibility with the systems institutions already use. This is the type of foundation required for serious capital to participate.
What Comes Next
SemiLiquid plans to expand the protocol in early 2026 with more custody partners, additional types of collateral, broader jurisdiction coverage, and support for under collateralized credit. The initiative begins in Abu Dhabi, which has become a leading hub for regulated digital asset innovation.
A Milestone for Digital Finance
This announcement might not create the excitement of market price swings, but it represents meaningful progress. When major institutions like Franklin Templeton and Standard Chartered backed custody providers test and adopt new infrastructure, it signals that digital assets are moving from experimentation to practical use.
The rise of tokenized assets is widely expected. The real question has been whether the infrastructure would be ready for institutional scale. Today’s launch shows that this foundation is finally taking shape.
SemiLiquid unlocks institutional lending on Avalanche.
Custody-native credit is the unlock here. Institutional treasurers dont care about yields if moving assets out of regulated custody creates operational headaches or compliance gaps. The Franklin pilot proves the thesis, tokenized funds generating returns while collateralized without ever leavng the vault is exactly how traiditional finance already works. If this scales, its not disruptive, its just removing the friction that kept instutions from treating onchain assets like any other liquid colateral.