# How can banks and specialist lenders access onchain capital?

Source: https://o2ocapital.com/learn/how-originators-access-onchain-capital
Published: 2026-10-15
Updated: 2026-10-23
Data as of: 2026-10-15
Last reviewed: 2026-10-23

For information only: nothing on this site is an offer to sell, or a solicitation of an offer to buy, any security. Open to eligible non-U.S. institutional investors only.

As of 15 October 2026, O2O Capital Partners is pre-launch: no vault or vault token is live.

[Niche private credit onchain](https://o2ocapital.com/learn/niche-private-credit-onchain)

Banks and specialist lenders access onchain capital by selling loans, or participations in them, to a fund or vault whose investors hold stablecoins. The originator keeps underwriting and servicing the loans. The fund buys them under eligibility criteria and concentration limits, reports their value through an independent administrator, and passes repayments back to the vault, where the token's net asset value rises as interest accrues.

By [Stephen McConville](https://o2ocapital.com/team/stephen-mcconville), Co-Founder, O2O Capital Partners; former Head of Product Structuring, Hedgehog Invest

O2O Research is general market commentary for information only. It is not investment advice, a recommendation or an offer of any security, including interests in any O2O vault. O2O may seek business relationships with protocols, curators or issuers it writes about.

## Key facts

Each figure shows its source and the date it describes.

- **USD-pegged stablecoins in circulation**: $305.5B. As of October 15, 2026. Source: [DefiLlama stablecoins](https://defillama.com/stablecoins) ([latest figure and source](https://o2ocapital.com/research/data/onchain-vault-market#stablecoin-supply))
- **Tokenized private credit**: $8.2B distributed value. As of October 15, 2026. Source: [RWA.xyz private credit](https://app.rwa.xyz/credit) ([latest figure and source](https://o2ocapital.com/research/data/onchain-vault-market#tokenized-private-credit))
- **Tokenized RWAs, distributed value**: $39.2B, plus $352.6B represented value. As of October 15, 2026. Source: [RWA.xyz](https://app.rwa.xyz/) ([latest figure and source](https://o2ocapital.com/research/data/onchain-vault-market#tokenized-rwa-distributed))

## Who provides onchain capital?

Onchain capital is money that institutions hold as stablecoins or other tokens on a blockchain and want to put to work. The people who decide where it goes are often called onchain allocators, and for a lender the useful question is what each group needs from an investment.

**Figure: Who provides onchain capital.** Six groups of onchain capital providers and what each needs. Most manage a stablecoin treasury. Groups as described in the October 2026 RWA vaults report.

Alt text: Six cards for stablecoin issuers, DAOs and protocol foundations, companies holding digital assets, borrowers against crypto collateral, vault curators and earn teams at fintechs, each with what it needs.

The main groups are:

- Stablecoin issuers, which hold reserves behind the tokens they issue and manage those reserves for safety and same-day liquidity.
- DAOs and protocol foundations, which hold a treasury for operating costs and reserves and want part of it to earn a steady return.
- Companies that hold digital assets on their balance sheets, some of which now manage those holdings actively onchain.
- Borrowers against crypto collateral, who take out stablecoins and look for somewhere to place them that does not move with the collateral they posted.
- Vault curators, who run onchain vaults for depositors, choose what each vault lends to and set its limits.
- Earn teams at neobanks and fintechs, which offer customers a return on stablecoin balances and source that return onchain.

Most of these groups manage what is called a stablecoin treasury: a balance kept for operations and reserves and managed for safety, liquidity and yield. [Stablecoin treasury yield](https://o2ocapital.com/learn/stablecoin-treasury-yield) explains where that balance earns a return today and how holders compare the options.

[The October 2026 RWA vaults report](https://o2ocapital.com/research/rwa-vaults-institutional-track-record), published on 12 October 2026, describes these buyer groups in more detail. It finds that most institutional onchain capital sits in overnight tokenized Treasury products or in crypto carry strategies, and that these holders are looking for income that does not rise and fall with crypto prices. The report names short-term receivables among the lower-risk assets such holders may add, and expects each new onchain integration to give banks and lenders another reason to originate for onchain buyers.

The Key facts box at the top of this page shows the stablecoin supply that could fund such loans and how much tokenized private credit RWA.xyz tracks today, each with its date and source.

## How does a loan book reach onchain investors?

The loans do not move onto a blockchain. The originator, the bank or specialist lender that makes and services them, sells the loans or a share in them to a fund. The fund raises money from depositors who hold stablecoins, and those depositors hold tokens that represent their share of the fund. The usual steps are:

**Figure: How a loan book reaches onchain investors.** The loans stay offchain. The originator sells them, or a share in them, to a fund, and depositors hold tokens for their share. Seven steps run from reviewing the originator to repayment and reuse. Illustrative structure.

Alt text: Diagram with an offchain and onchain divider showing originator, fund, independent administrator, oracle, vault and depositors, above seven numbered steps.

1. Review of the originator. The fund's manager studies the lender's track record, underwriting process, collections, loss history, systems and financial standing, and reads a sample of its loan documents.
2. Review of the loan book. The manager receives a loan-level history, often called a data tape, and tests how the loans have paid, how often they were late and what was recovered when they failed.
3. Terms of sale. A purchase or participation agreement sets which loans the fund may buy (the eligibility criteria), how much it may hold of any one borrower, industry or country (the concentration limits), the price, what the originator promises about each loan and what happens when a loan turns out not to meet the criteria.
4. Funding. Depositors' stablecoins enter the vault. The fund converts them into the currency the loans are made in and pays the originator for the loans it buys.
5. Servicing. The originator keeps collecting payments from borrowers and passes them to the fund's account on a set schedule, along with reports on the loans.
6. Valuation. An independent fund administrator values the loans, keeps the fund's books and calculates what each fund share is worth.
7. Repayment and reuse. As loans repay, the fund either buys new loans that meet the criteria or holds the cash to meet depositors who want to leave.

Some funds buy whole loans. Others buy a participation, a share of each loan's payments, while the originator keeps the loan on its own books. Some lend to a vehicle the originator sets up, secured by the loans in it. The steps above apply to each, with different documents.

## What do onchain funds look for in a loan book?

Funds that sell tokens to stablecoin holders usually promise a way out within weeks or months, so they look first at how quickly loans turn back into cash. Beyond that, the list is close to what any institutional buyer of loans asks for:

**Figure: What onchain funds look for in a loan book.** Eight criteria, with short loans looked at first. Each fund publishes its own criteria and limits in its offering documents.

Alt text: Scorecard of eight criteria onchain funds look for in a loan book, from short loans to returns that do not depend on crypto prices.

- Short loans that repay themselves from the financed asset's own cash flows, such as invoices that buyers pay or lease rents that arrive monthly.
- A long loan-level history, ideally through at least one downturn, so that losses can be estimated from data.
- Clear documents that give the fund a claim on each loan and on the payments from it.
- Many borrowers, so that one failure does not decide the fund's result.
- A servicing team and systems that can report on every loan, often, in a fixed format.
- Some of the originator's own money at risk, for example a retained share of each loan or a first-loss position, so that the originator gains when the loans perform and loses when they do not.
- Loans that can be valued on a set schedule with a stated method.
- Returns that do not depend on crypto prices, since the holders already carry that risk elsewhere.

Each fund publishes its own criteria and limits in its offering documents. A lender comparing funds reads those documents to see which of its products fit and on what terms.

## How do reporting and NAV work for the originator?

Reporting is where an onchain fund feels most different to a lender. The originator's data becomes the input to a price that token holders can see onchain, on a schedule set by the fund's valuation dates.

**Figure: The reporting and NAV loop.** The originator's loan tape feeds the independent administrator, who checks it against collection account statements and calculates NAV per share. An oracle posts the price onchain. Illustrative structure.

Alt text: Five step loop from loan tape to independent administrator, NAV per share, onchain price and investor reporting, with three takeaways for the originator.

A typical reporting cycle has four parts:

- The originator sends a loan-level report on a fixed schedule: new loans, payments received, late loans, defaults, recoveries and any change to a loan's terms.
- The fund's bank or collection account statements show the cash that actually arrived, so the report can be checked against them.
- The independent fund administrator values each loan under the fund's stated method, adds the cash, takes away fees, expenses and other liabilities, and divides by the number of shares.
- An oracle posts the result onchain, where the vault's contracts use it to price new deposits and redemptions.

The result is the fund's net asset value, or NAV, per share. Between valuation dates, interest earned on the loans adds to the fund's assets, so the NAV rises when the loans perform. A late or written-down loan lowers it. [What is a NAV-priced vault token?](https://o2ocapital.com/learn/nav-priced-vault-tokens) explains how the price is set, posted and used.

For the originator this means three things. Reports must arrive on time and in the agreed format, because a missing report can delay a NAV. Errors surface quickly, since the administrator reconciles the reports with bank statements. And the fund's auditor and administrator may ask for supporting records at each valuation date and at the year end.

## What changes for the originator?

Selling loans to an onchain fund adds a funding source alongside the familiar ones: bank lines, warehouse facilities, securitization and forward-flow agreements with institutional buyers. Much of the day-to-day work stays the same. The originator still finds borrowers, underwrites them, sets terms and collects payments.

What changes is mostly around the edges:

- The investor base. The fund's investors are onchain allocators. The originator deals with the fund's manager and administrator, and the fund decides who may hold its tokens, usually through a list of identity-verified wallets.
- Currency and timing. Depositors fund the vault in stablecoins and the fund converts them, so the originator usually receives and repays in its normal currency. The fund's own subscriptions and redemptions follow the vault's schedule.
- Transparency. Some of the originator's data, in summary form, may reach token holders through fund reports or onchain dashboards.
- Funding stability. A fund's capacity to buy new loans depends on deposits staying in the vault. When many holders ask to leave, the fund may stop buying and keep repayments as cash.
- Documentation. The originator signs a sale or participation agreement, a servicing agreement and reporting terms, and may need to adjust its systems to report in the fund's format.

[How trade receivables financing works](https://o2ocapital.com/learn/trade-receivables-financing) shows how these steps apply to one segment, where invoices repay within weeks.

## What are the risks and trade-offs?

Both sides carry risks, and each side's controls cost the other something.

For the originator:

- Funding can shrink when depositors redeem, so a lender that relies on one fund can find its funding cut when it needs it most.
- Reporting and servicing to an institutional standard takes staff and systems.
- A retained share or first-loss position ties up the originator's own capital.
- The fund's documents may require the originator to buy back loans that break the agreed criteria.
- Public visibility cuts both ways: good performance is easy to see, and so is a bad quarter.

For the fund and its token holders:

- Credit risk: borrowers fail to pay, and losses depend on the originator's underwriting and on what can be recovered.
- Servicer risk: if the originator fails or misreports, collections can stop while a replacement takes over.
- Valuation risk: private loans have no market price, so the NAV depends on the administrator's method and on the originator's data, and it can be slow to show a loss.
- Liquidity mismatch: the token may promise faster exits than the loans repay.
- Conversion, stablecoin, smart contract and oracle risks, which come with moving money between a blockchain and a bank account.
- Legal risk: the fund's claim on the loans, and the holders' claim on the fund, rest on documents and on the courts that enforce them.

[What is tokenized private credit?](https://o2ocapital.com/learn/what-is-tokenized-private-credit) covers the holder's side of these risks, including how tokens are valued and redeemed.

## Sources

1. DefiLlama, [Stablecoins](https://defillama.com/stablecoins). Retrieved October 15, 2026. Data as of October 15, 2026.
2. RWA.xyz, [Tokenized Credit](https://app.rwa.xyz/credit). Retrieved October 15, 2026.
3. RWA.xyz, [Analytics on Tokenized Real-World Assets](https://app.rwa.xyz/). Retrieved October 15, 2026.

## Related

- [Niche private credit onchain](https://o2ocapital.com/learn/niche-private-credit-onchain)
- [How does trade receivables financing work?](https://o2ocapital.com/learn/trade-receivables-financing)
- [What is a NAV-priced vault token?](https://o2ocapital.com/learn/nav-priced-vault-tokens)
- [What is tokenized private credit?](https://o2ocapital.com/learn/what-is-tokenized-private-credit)
- [Real-World Asset Vaults Begin their Institutional Track Record](https://o2ocapital.com/research/rwa-vaults-institutional-track-record)

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