US bank Cross River is working with Offchain Labs, the developer behind Arbitrum, to build blockchain registration directly into its lending platform, so loans can be tokenized at origination. The bank announced the partnership on November 3, with CEO and founder Gilles Gade describing it as “enabling assets to be tokenized at origination.”
In most tokenization projects, an existing loan is moved onto a blockchain after it has been created. Cross River’s approach makes tokenization part of the process by which the bank creates the loan, so the digital asset can be financed, held and transferred on Arbitrum One from day one. Arbitrum One is a public layer-2 network that bundles transactions and records them on Ethereum. Cross River uses Offchain Labs services to connect the network to its own systems and wallets, while the bank remains responsible for issuing and managing the loans.
For professional investors, this could simplify administration and transfers, because a fund buying such loans would not need to wait for data from several systems to be reconciled. The partnership may also give Cross River access to new buyers, such as funds already active on blockchain networks and international investors, though it is not known whether they will take part.
Key details are still missing. The companies have not said which loan types will be tokenized first, what legal transfer terms apply, or when a first loan, transaction volume or commercial client will follow. This is infrastructure for financial institutions, not a new consumer product.
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Sources:
Cross River: Cross River and Offchain bring native tokenization to lending infrastructure
Crypto Insiders: Amerikaanse bank zet leningen vanaf dag één op Arbitrum
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