Galaxy's Novel Debt Issuance
Galaxy Digital has successfully executed a tokenized commercial paper issuance, with JPMorgan serving as the arranger. This transaction represents one of the earliest U.S. debt deals conducted on a public blockchain. The initiative introduced the USCP token, which is a representation of Galaxy’s short-term corporate debt built on the Solana blockchain. This development signifies the integration of established financial entities into an on-chain funding process.
Coinbase and Franklin Templeton were among the purchasers of Galaxy’s newly issued debt. Coinbase also provided crucial custody and wallet services for the USCP token. JPMorgan was responsible for structuring the offering, characterizing the transaction as a test case for the potential of capital-market instruments operating on programmable, public infrastructure. The specific size and terms of the issuance were not disclosed by the participating firms. Notably, both the issuance and redemption processes will settle in USDC, ensuring a fully digital lifecycle for the debt from its inception to its repayment.
Scott Lucas, JPMorgan Head of Markets Digital Assets, stated, "Today’s transaction is an important step toward understanding the role blockchain will play in the future of financial markets. This trade demonstrates institutional appetite for digital assets and our capability to securely bring new instruments on-chain using Solana."
Investor Takeaway
Institutional buyers are now actively acquiring tokenized corporate debt that is issued directly on public blockchains. This marks a significant evolution from initial small-scale pilots towards actual funding operations, with regulated firms actively participating at every stage of the process.
Understanding the USCP Token
The USCP token functions as a blockchain-native format for Galaxy’s short-term corporate debt, specifically created by JPMorgan to facilitate this issuance. This structure enables Galaxy to raise capital through a tokenized instrument rather than relying on traditional paper certificates, while still adhering to corporate debt frameworks that are recognized by institutional investors.
The settlement of transactions in USDC eliminates the necessity for conventional clearing channels, thereby digitizing the entire workflow. This includes token creation, distribution, custody, and repayment. Coinbase's involvement encompasses private-key custody and the provision of on- and off-ramps for USDC, offering institutional holders direct access to a money-market-like instrument without needing to exit regulated financial environments. Galaxy indicated that this format enhances its short-term funding options and has the potential to attract a broader range of institutional buyers as the market for tokenized debt continues to expand.
In a joint statement, the companies noted, "The on-chain USCP format strengthens the firm’s short-term funding capabilities and opens access to a growing base of institutional investors incorporating blockchain-based money-market instruments into their portfolios."
Jason Urban, Galaxy’s Global Head of Trading, added, "This issuance is a clear example of how public blockchains can improve the way capital markets operate. By bringing our first commercial paper offering on-chain and helping structure one of the earliest U.S. transactions of its kind, we’re putting into practice the model we’ve long believed in: open, programmable infrastructure that supports institutional-grade financial products."
The Drive Behind Tokenized Debt Testing by Major Institutions
There has been a notable acceleration in tokenization experiments as financial firms seek to reduce settlement friction and develop instruments that can operate natively on-chain. Franklin Templeton has already established a substantial on-chain portfolio of U.S. government securities, and other financial groups are actively issuing digital bonds and commercial paper through their proprietary blockchain initiatives.
Earlier this year, B2C2 issued the first entirely on-chain corporate bond on the Ethereum blockchain. Singapore’s Oversea-Chinese Banking Corp established a $1 billion digital U.S. commercial paper program utilizing JPMorgan’s Digital Debt Service. Societe Generale successfully completed a digital bond issuance in the U.S. on Broadridge’s platform, employing the Canton blockchain. Guggenheim Treasury Services has explored issuing commercial paper on both Ethereum and the XRP Ledger, while DBS has utilized Ethereum for structured notes.
Although these pilot programs vary in scale, the overarching trend is clear: an increasing number of issuers are opting to release debt instruments directly on blockchains, rather than relying on digitized versions of traditional certificates.
Galaxy's On-Chain Strategy Alignment
Galaxy Digital has been actively testing on-chain corporate workflows for several years. Earlier in 2025, the company issued tokenized representations of its SEC-registered stock on Solana, providing shareholders with blockchain-based versions of their equity holdings. The firm is also a key supporter of Forward Industries (FORD), which manages the largest Solana treasury and is focused on developing innovative financial mechanisms for tokenized assets.
The recent commercial paper issuance represents an additional layer to these ongoing experiments, extending them into treasury operations and short-term funding activities. While Galaxy has not specified the frequency of its planned tokenized debt issuances, its collaboration with JPMorgan, Coinbase, and Franklin Templeton suggests that the necessary infrastructure and an established investor base are already in place to support recurring offerings.
The widespread adoption of tokenized commercial paper as a mainstream funding channel will likely be contingent on regulatory alignment, sustained investor demand, and consistent settlement reliability. For the present moment, Galaxy’s transaction underscores the willingness of multiple regulated institutions to handle, custody, and purchase Solana-based debt instruments, a scenario that was virtually unimaginable just a year prior.