Huma Finance Secures $38M to Expand Tokenized RWA-Based PayFi Platform

Huma Finance has raised $38 million in a funding round aimed at expanding its payment-financing (PayFi) platform, which leverages tokenized real-world assets (RWA).

The investment includes $10 million in equity and $28 million in yield-bearing RWAs, according to a recent report by Insider.

The equity round was spearheaded by Distributed Global, with notable backing from Hashkey Capital, Folius Ventures, Stellar Development Foundation, and TIBAS Ventures, the venture arm of Turkey’s largest private bank, İşbank.

Meanwhile, Stellar Development Foundation led the RWA portion of the funding, contributing $10 million.

Tokenized RWAs Consist of Multitranche Bonds

The tokenized RWAs consist of multitranche bonds with varying maturities, wrapped into exchange-traded products.

These were issued by Arf Capital, a Switzerland-based firm operating under Swiss Distributed Ledger Technology (DLT) laws.

Huma co-founder Erbil Karaman highlighted this in an email interview, underscoring the regulatory compliance that underpins the investment.

Huma Finance plans to use the funds to extend its platform to additional blockchain ecosystems, including Solana and Stellar’s Soroban smart-contract network, in the coming months.

Announcing $38M in funding to hyper-scale our PayFi Network! This round fuels our mission to transform global payment financing.
Read more: https://t.co/4veDkOaRz8 pic.twitter.com/plCVeZFORJ

— Huma Finance 🟣 (@humafinance) September 11, 2024

Tokenized RWAs are emerging as a key application of blockchain technology, enabling financial institutions to move assets like bonds and credit onto distributed ledgers.

The shift promises faster settlements, improved transparency, and greater operational efficiency.

Earlier this year, Huma Finance merged with Arf, combining efforts to focus on tokenizing RWAs.

Although the two companies remain independent, they now operate under a joint holding entity, providing a comprehensive tokenized asset platform.

Huma projects that the combined entity will process $10 billion in payments-financing transactions next year.

“Huma’s PayFi network marks a paradigm shift in payment financing, bringing essential liquidity and interoperability to an industry long plagued by inefficiencies and limited access,” said Chao Deng, CEO of Hashkey Capital, one of the investors in the company.

Tokenized Asset Market Could Reach $1.3T by 2030

Some in the crypto community have cast doubt on a recent projection suggesting that tokenized real-world assets (RWAs) could reach a staggering $30 trillion by 2030.

Among the critics is Jamie Coutts, chief crypto analyst at Real Vision, who believes that a more realistic valuation is closer to $1.3 trillion.

Coutts pointed out that if the current compound annual growth rate (CAGR) of 121% for tokenized assets continues, the market could indeed reach $1.3 trillion by 2030.

Coutts’ cautious outlook is echoed by other industry experts.

McKinsey & Company recently reported that tokenized financial assets have had a “cold start” but are still expected to grow to a $2 trillion market by 2030.

Meanwhile, a report by the Global Financial Markets Association (GFMA) and Boston Consulting Group estimates the global value of tokenized illiquid assets will reach $16 trillion by 2030.

Even more conservative estimates from Citigroup suggest that $4 trillion to $5 trillion worth of tokenized digital securities could be minted by 2030.

Recognizing this potential, major companies are making significant moves in the tokenization space.

Goldman Sachs, for instance, plans to launch three new tokenization products later this year, driven by growing client interest.