Bitfinex revives tokenized bonds targeting crypto-native yield seekers

Bitfinex Securities announced it will resume issuing tokenized bonds for the Luxembourg-based securitization fund ALTERNATIVE, with future sales projected to surpass $10 million. These USDt-denominated bonds will be issued and settled on the Liquid Network, a Bitcoin sidechain, with all fundraising, coupon payments, and principal repayments conducted on-chain.

Past Performance and Investment Focus

This initiative follows four previous tokenized bond issuances since 2023, totaling $6.2 million. Three of these issuances have already matured and been fully repaid, returning approximately $1 million in principal to investors. Investors in these offerings received over 20 on-chain coupon payments, amounting to more than $1.1 million, by the completion of their first full tokenized bond cycle in 2025. The bonds provide investors access to emerging-market private credit, including financing for small and medium-sized businesses and women-led enterprises.

Jesse Knutson, head of operations at Bitfinex, stated that the primary buyers have been high-net-worth crypto investors and crypto-focused institutions from Europe and Asia seeking yield on their USDt holdings. The tokenized bonds typically have an 11-month duration and operate alongside the issuer’s conventional monthly bond program. Transactions are recorded on the Liquid Network, with confidential transaction features shielding key settlement details.

Knutson highlighted that this product offers a regulated and established method for earning yield on USDt balances, addressing the ongoing discussion around yield-generating stablecoins.

Regulatory Landscape and Stablecoin Yield Debate

The relaunch occurs amidst an ongoing debate in the United States regarding whether stablecoins should be permitted to offer yield and how such products should be regulated. While the US GENIUS Act, passed in July 2025, barred stablecoin issuers from paying yield, it did not explicitly prevent third parties from offering returns through separate products. This has allowed platforms to structure instruments that generate yield in stablecoins.

Banks have expressed concerns that high-yielding stablecoin products could divert deposits from the traditional financial system. Bank of America CEO Brian Moynihan suggested that interest-bearing stablecoins could drain up to $6 trillion in deposits from US banks, potentially reducing lending capacity and increasing funding costs.

The issue of stablecoin yield has become a significant point of contention within the CLARITY Act, proposed US legislation for digital assets. Coinbase CEO Brian Armstrong withdrew support for the bill in January, citing stablecoin yield as a key obstacle. However, some lawmakers remain optimistic, with Senator Bernie Moreno expressing hope for progress on market structure legislation by April. Prediction market data from Polymarket indicates a 70% probability that the Clarity Act will be enacted in 2026.