Flow Capital's $150M Tokenization Play: Blockchain Distribution for Private Credit Comes With Liquidity Caveats

Flow Capital Partners is making a calculated move into the tokenized asset space, planning to tokenize its $150 million private credit fund through Singapore-based DigiFT by end of April. The Hong Kong credit manager is banking on blockchain-based distribution to raise an additional $30 million in tokenized shares by end of 2026, according to Flow Capital CIO Jacky Tian.

The strategy fits into Flow Capital's broader expansion roadmap: grow the fund from its current $150 million to $250 million while targeting a net return of 12%. The fund itself launched mid-2025 with $125 million in seed capital, so this tokenization initiative represents a strategic pivot toward on-chain liquidity channels for their next growth phase.

Traditional Finance Giants Already Betting on Tokenized Assets

Flow Capital isn't pioneering this space—we're seeing major TradFi players make similar moves. BlackRock launched its tokenized treasury fund (BUIDL) on Ethereum in March 2024, while JPMorgan brought its tokenized money-market fund (MONY) to Ethereum in December 2025. These institutional endorsements have legitimized tokenization as a distribution channel for traditional credit products.

The broader crypto and blockchain market is clearly responding. Tokenized real-world assets (RWAs) hit $29.9 billion in total value as of Friday—a 9.6% jump over the past 30 days. Tokenized US treasury debt dominates at $13.7 billion, followed by commodities ($5.4 billion) and asset-backed credit ($3.2 billion).

The Liquidity Reality Check

But here's where we need to pump the brakes. Industry executives are increasingly vocal about a dangerous misconception: that tokenizing something automatically makes it liquid. That's simply not how markets work.

Oya Celiktemur, Ondo Finance's sales director for Europe, cut through the noise during Paris Blockchain Week 2026: "I think there's still this idea that tokenizing something illiquid will somehow magically make it a liquid asset, which is just not true."

Francesco Ranieri Fabracci, head of tokenization expansion at Tether, echoed this reality. While he acknowledged that certain instruments—bonds, money market funds, and stablecoins—will likely see consistent liquidity on blockchain rails, the blanket assumption that all tokenized assets become tradeable is flawed.

This matters for crypto investors evaluating tokenization strategies. Flow Capital's play could work because private credit is becoming institutionalized and increasingly sought after by wealth managers. But tokenizing a hard-to-trade asset doesn't magically create buyers. You still need genuine market demand, regulatory clarity, and secondary market infrastructure.