Galaxy Digital led a $20 million funding round for Fence, a blockchain-powered fintech startup automating back-office operations in asset-backed finance. The round, announced April 29, 2026, includes co-investors Parafi Capital and Crane Ventures. Fence uses smart contracts and tokenization to replace manual workflows across loan tracking, collateral verification, and cash settlement—processes that currently rely on spreadsheets, PDFs, and fragmented systems across the $6 trillion asset-backed finance market.
Automating the Plumbing of Capital Markets
Asset-backed finance—the securitization of loans and other receivables—remains one of the least digitized corners of capital markets. Banks, funds, and servicers track assets through email chains and periodic reporting cycles, creating operational friction and extended deal timelines. Fence rebuilds this infrastructure using blockchain as the backend layer. The company’s smart contracts automate loan tracking, reporting, collateral verification, and cash movement in real-time, replacing batch processes with continuous settlement. CEO Juan Montero has framed the mission sharply: “We don’t want to be seen as a blockchain company. We’re building the infrastructure for the capital markets. Others digitize the paperwork. Fence rebuilt the plumbing.” The technology enables deal onboarding in weeks rather than months—a material advantage in a market where operational delays compound funding costs for borrowers.
Real-World Traction at Scale
Fence operates with three heavyweight clients: BBVA, the Spanish bank with $800 billion in assets; BlackRock; and Fortress Investment Group. The company currently oversees $1.5 billion in assets on its platform, demonstrating active adoption beyond proof-of-concept. Galaxy Digital’s involvement carries credibility—founder Mike Novogratz has positioned the firm as infrastructure-focused rather than speculative. The $20 million round signals institutional conviction that blockchain-based operational layers can solve real friction in institutional finance, not just retail trading or DeFi protocols. Parafi Capital and Crane Ventures’ participation broadens the syndicate across both crypto-native and traditional fintech investors.
Tokenization Enters Back-Office Infrastructure
Fence represents a shift in how blockchain technology is deployed in capital markets. Rather than replacing custody or settlement with new blockchain rails, Fence uses tokenization and smart contracts to optimize internal workflows—the unglamorous but critical plumbing between origination, servicing, and reporting. This approach sidesteps the regulatory complexity of replacing legacy settlement layers while capturing operational efficiency gains. Asset-backed securities are a $6 trillion market; even marginal improvements in operational costs and deal velocity could justify significant infrastructure spending. The success of Fence will test whether blockchain-based operational tools can scale within traditional finance’s risk and compliance frameworks.
What’s Next for Fence
The funding positions Fence to expand its client roster and deepen integration with existing banking infrastructure. Specific cost savings and regulatory approval milestones remain undisclosed. The company’s competitive moat depends on integrating deeply with major servicers and custody providers—a sales and engineering challenge distinct from pure technology. Success would validate the thesis that blockchain works best as invisible infrastructure rather than a customer-facing feature.
