Pencil Finance Completes $1M Fully Onchain Student Loan Cycle Reaching 6,600 Students in Southeast Asia
Key Takeaways
- •Pencil Finance completed a $1 million fully onchain student loan cycle, which it calls the first such cycle transparently recorded on a blockchain.
- •The financing reached approximately 6,600 students across 118 schools and universities in Southeast Asia, with about 1,050 directly funded.
- •The loan bundle was funded in July 2025 by Animoca Brands, Open Campus and New Campus, using a senior tranche with fixed returns and a junior tranche with variable returns and first-loss risk.
- •Half of the borrowers were female and 93% came from lower-income households underserved by traditional lenders.
- •The tokenized RWA sector continues to expand, with private credit and US Treasury instruments among its largest asset classes, and related initiatives including a Brazilian loan secured by tokenized cows.
Pencil Finance, a student loan real-world asset (RWA) protocol, has completed a $1 million onchain student loan cycle that provided financing to thousands of students in Southeast Asia who were underserved by traditional lenders.
In a Thursday announcement shared with Cointelegraph, the company said it completed its first fully onchain student loan cycle, deploying $1 million in capital as a lender. Borrowers repaid the loans with yield passed on to the bundle's funders.
The bundle was funded in July 2025 by Animoca Brands, Open Campus and New Campus. It was structured in two layers: a senior tranche with fixed returns and a junior tranche carrying variable returns and first-loss risk — a risk-layering approach common in structured finance that, applied onchain, allows investors to choose their risk-return profile while making the loan performance visible on a public ledger.
According to the company, the $1 million cycle financed approximately 6,600 students across 118 schools and universities in Southeast Asia, of whom about 1,050 received direct funding. Pencil Finance says this is the first-ever fully onchain lending cycle financing student loans transparently recorded on a blockchain network.
The loans were designed for students underserved by traditional lenders, with 50% of borrowers female and 93% coming from lower-income households. The cycle points to a broader use case for onchain credit: in many emerging markets, students lack collateral and formal credit histories, which conventional banks typically require before extending education loans, leaving financing gaps that alternative lending channels have sought to fill.
Tokenized RWAs — blockchain-based representations of off-chain assets — are increasingly being used to issue or collateralize loans, with onchain credit protocols bringing greater transparency and programmability to lending markets. The tokenized RWA sector has grown substantially in recent years, with private credit and United States Treasury instruments among the largest asset classes tracked by industry data providers.
In a related development, Brazil's B3 stock exchange issued a 100,000 Brazilian reais ($19,600) loan in July secured by 10 tokenized cows as collateral. Each cow received a unique digital token linked to an encrypted digital identity, while AI-powered smart collars from agriculture tech company Cowmed monitored each animal's health.
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