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Credit Risk

Credit risk is the risk that a borrower or other party responsible for making financial payments fails to meet its obligations in full or on time. It is fundamental to bonds, loans, private credit and many other debt investments.

Why it matters to you

Tokenizing debt does not improve the creditworthiness of the borrower. A loan can settle efficiently on a blockchain and still be a poor investment if the borrower cannot repay it. For credit based RWAs, understanding who owes the money and their ability to repay it remains fundamental.

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