Cointelegraph Research and Eight Lends report how RWA private credit bridges onchain capital searching for yield with EU SMEs facing a funding drought, especially as Treasury yields outpaced DeFi yields post-2022.
DeFi & Yields ·
After seven Federal Reserve rate hikes in 2022, 10-year Treasury yields climbed above low-risk decentralized finance returns, reaching roughly 3.9% by year-end compared with approximately 2.4% for comparable onchain instruments. This reversal eliminated the yield advantage that had previously encouraged capital to remain on blockchain networks.
Simultaneously, European Union small and medium-sized enterprises faced acute financing constraints. New SME lending in the bloc contracted 12% in 2023, with an annual funding shortfall of €39 billion and cumulative unmet financing needs exceeding €211 billion across 2017 to 2023. By 2024, 7.6% of EU SMEs reported financial strain. This mismatch—onchain capital seeking returns and SMEs requiring capital—has generated interest in real-world asset private credit as a bridging mechanism.
A joint research effort examined whether RWA private credit structures can effectively connect blockchain-based liquidity with traditional SME borrowers. The precise mechanics of credit origination, underwriting standards, and regulatory treatment across jurisdictions remain subjects of ongoing evaluation.