SemiLiquid Launches Programmable Credit Protocol on Avalanche, Enabling Institutional Lending on Tokenized Collateral

SemiLiquid, a custody-native infrastructure provider, has officially unveiled its Programmable Credit Protocol (PCP) at Abu Dhabi Finance Week 2025. The protocol represents a foundational advancement for institutional credit markets, allowing financial institutions to activate credit lines against digital and tokenized assets held in custody—without the need to physically transfer collateral. This eliminates counterparty risk and operational friction that have historically plagued bilateral lending.

The launch follows a successful pilot program involving major industry players: Franklin Templeton, Zodia Custody, Avalanche, Presto Labs, M11 Credit, Oasis Foundation, and law firm CMS. During the pilot, Franklin Templeton's daily-yielding tokenized money-market fund, BENJI, was used as collateral. The assets remained encumbered under pre-agreed, automated terms, allowing the borrower to retain full daily yield while providing lenders with enforceable security.

Developed and launched in Abu Dhabi with plans for a global rollout, the protocol underscores the region's growing role as a hub for digital asset innovation. "Programmable assets require programmable credit," said Rico van der Veen, Co-Founder and CEO of SemiLiquid. "PCP delivers the missing rail that institutions need - a standardized, custody-native & shared legal framework that merges the trust of traditional finance with the efficiency of programmable assets."

Industry leaders highlighted the protocol's significance. Khalid Dannish of Ava Labs noted that "Avalanche’s high-performance, institutional-grade infrastructure, combined with SemiLiquid’s programmable credit protocol, creates a clear path to scaling institutional adoption." The news arrives as tokenized assets are projected to reach a $10 trillion market by 2030, yet over 70% of institutional bilateral financing still relies on inefficient, paper-based processes.

SemiLiquid is now advancing to Phase II, slated for launch in early 2026, which will expand integrations to additional custodians, collateral types, and jurisdictions. Future capabilities aim to include under-collateralized lending supported by verified solvency attestations.