SemiLiquid introduced its Programmable Credit Protocol (PCP) on December 8, 2025, during Abu Dhabi Finance Week, unveiling a novel solution for institutional credit on tokenised assets. Built on the Avalanche blockchain, PCP enables credit activation against digital collateral held in custody without transferring assets, a breakthrough for DeFi institutional adoption. Developed within Abu Dhabi’s supportive regulatory ecosystem, PCP aims for a global rollout, reinforcing the emirate’s leadership in digital asset finance.

Breakthrough in Institutional DeFi Lending

The PCP launch followed a successful pilot involving major industry participants, such as Franklin Templeton, Zodia Custody, Avalanche, Presto Labs, M11 Credit, Oasis Foundation, and CMS. During the pilot, Franklin Templeton’s tokenised money-market fund, BENJI, served as collateral, remaining encumbered but never moved throughout the loan lifecycle. This approach granted lenders enforceable rights while allowing borrowers to continue earning the full daily yield, effectively removing counterparty risk and operational friction from collateral transfers.

Rico van der Veen, SemiLiquid’s Co-Founder and CEO, emphasized the protocol’s impact: “Programmable assets require programmable credit. PCP provides the missing rail for institutions—a standardized, custody-native legal framework that integrates traditional trust with programmable asset efficiency.” He credited Abu Dhabi Global Market’s risk-aware environment for facilitating development within a compliant framework.

Anoosh Arevshatian, Chief Product Officer at Zodia Custody, highlighted custody infrastructure’s role as a foundational trust layer for scaling programmable credit. Khalid Dannish, Head of MENA at Ava Labs, noted that Avalanche’s high-performance infrastructure combined with PCP’s programmable credit establishes a clear path for institutional-grade on-chain financial markets. Matthew Nyman, Digital Assets Lead at CMS, affirmed the pilot’s legal rigor and the viability of digital private credit in institutional markets.

Expanding Tokenised Collateral Finance

Despite tokenised assets expected to hit $10 trillion by 2030, over 70% of institutional bilateral financing today still depends on paper-intensive workflows with collateral transfers across fragmented systems. These outdated practices introduce inefficiencies, counterparty risks, and scalability limits for tokenised collateral markets.

SemiLiquid’s PCP demonstrates both technological maturity and legal enforceability for custody-native credit, tackling these barriers head-on. The company plans to advance into Phase II in early 2026, broadening integrations with more custodians, collateral types, and jurisdictions. It will also pursue features like under-collateralized lending backed by verified solvency attestations and a unified enforceability framework across markets.

DeFi: Market Outlook and Institutional Adoption

SemiLiquid’s PCP sets a new benchmark by pairing programmable credit with custody-based digital asset infrastructure, aiming to eliminate counterparty risk while ensuring compliance, enforceability, and operational efficiency. As institutions increasingly adopt tokenised collateral, PCP’s progression marks a vital step in embedding DeFi solutions into traditional capital markets.

Supporting its ambitions, Abu Dhabi’s regulatory environment and its emergence as a hub for digital asset innovation strengthen SemiLiquid’s global expansion plans. PCP stands poised to transform how programmable credit scales within institutional finance, driving the next phase of DeFi evolution.

Investors and market participants seeking further details can visit https://pcp.co/.