CREDI vs. xCREDI: The Key Differences

CREDI is the main utility token within the Credefi ecosystem. It powers basic functionalities such as lending, staking, and collateralization, forming the foundation of the platform.

In contrast, xCREDI is a variable-supply token obtained by burning CREDI. It offers advanced utilities like governance participation and revenue sharing while introducing a deflationary mechanic that benefits long-term holders. Together, these tokens complement each other, with CREDI as the foundational asset and xCREDI as a more exclusive, value-driven token tied to platform growth.

How to Obtain xCREDI

There are two primary ways to acquire xCREDI.

‍The first is through conversion. Users deposit CREDI into the Credefi Security Module, where the deposited tokens are burned, and xCREDI is minted at a rate determined by a bonding curve. The more xCREDI is minted, the higher the cost for subsequent conversions, introducing scarcity and rewarding early adopters. For example, depositing 1,000 CREDI at a 1:1 rate might yield 100 xCREDI per month over ten months.

‍The second method is direct purchase. xCREDI can be bought on decentralized exchanges such as UniSwap or centralized exchanges, depending on availability. This provides an accessible alternative for users who prefer not to burn CREDI.

The Long-Term Play for xCREDI

xCREDI is designed to be a deflationary and value-accruing asset, making it an attractive long-term investment.

Governance participation is a core feature of xCREDI. Holders can influence the platform’s direction by voting on upgrades, new features, and strategic decisions, playing an active role in Credefi’s development.

The token also offers perpetual revenue sharing. Ten percent of all platform fees and interest revenue are allocated to a buyback and liquidity provision program. The xCREDI/USDT liquidity pool tokens purchased through this program are burned, reducing the supply of xCREDI and increasing its scarcity over time. As Credefi grows, the platform’s revenue increases, creating more demand for xCREDI and enhancing its value for holders.

Additionally, xCREDI holders can provide liquidity to trading pairs like xCREDI/USDT on decentralized exchanges. By doing so, they earn trading fees and can stake their liquidity pool tokens in the Credefi Security Module for additional rewards in CREDI.

The bonding curve mechanics further support long-term value. Early adopters enjoy lower conversion costs, while those who join later face higher rates, incentivizing early participation and creating a natural control over supply.

How the Swap Between CREDI and xCREDI Works

The conversion process from CREDI to xCREDI is straightforward yet carefully designed to maintain system stability. Users deposit their CREDI tokens into the Credefi Security Module. Once deposited, the CREDI is burned, and xCREDI is minted.

The conversion is gradual, often occurring over a defined period. For example, a deposit of 1,000 CREDI may yield 100 xCREDI per month for ten months. During this time, the unconverted CREDI remains usable by the security module to support system stability. This structured approach prevents sudden market fluctuations and ensures consistent token dynamics.

Why xCREDI Matters

xCREDI’s unique design makes it an integral part of the Credefi ecosystem. Its deflationary nature, driven by continuous buybacks and LP token burns, creates scarcity and boosts its value over time.

Beyond governance, xCREDI offers enhanced utility through passive income opportunities like liquidity provision and revenue sharing. This makes it a compelling asset for both active and passive participants.

Additionally, the gradual conversion process ensures a balanced token economy, supporting long-term growth while preventing sudden market disruptions.

Key Takeaways

CREDI powers the Credefi ecosystem, while xCREDI rewards long-term commitment, governance participation, and revenue sharing. The bonding curve model encourages early adoption, while deflationary mechanics increase value for xCREDI holders over time.

Through its integration of governance, incentives, and deflationary features, xCREDI offers users a unique opportunity to grow alongside the Credefi platform. It represents a sophisticated blend of blockchain technology and real-world financial innovation, ensuring stability, growth, and value for all participants.

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During the Crypto Asset Conference earlier this week, Luis Nacarino from Santander said that Fnality was expected to “receive Federal Reserve approval later this year.” Fnality is backed by 20 global financial institutions, including Santander. It operates a tokenized settlement system for institutions, in which the shared payment tokens are backed by central bank reserves.

We asked Fnality about its US regulatory status and a spokesperson responded via email:

“Fnality is in the process of securing an innovation bank charter from the Connecticut Department of Banking and has applied for a joint account with the Federal Reserve which would be used to operate the Dollar Fnality Payment System($FnPS). In March 2025, a public hearing was held on Fnality’s submission for an innovation bank charter. The US is a priority market for us and our aim is to go live as soon as possible, subject to regulatory approval.”

In August 2022, the UK’s Treasury deemed Fnality a systemically important payment institution. The UK approval to go live took years longer than originally anticipated. But there are several reasons why the US one might progress faster.

Firstly, global regulators strongly prefer securities settlement using central bank money because it reduces counterparty risk. Yesterday ICE, the parent of the New York Stock Exchange, said it plans to use stablecoins. With the appropriate regulatory regime for bankruptcy, stablecoins may be better than commercial bank money. But central bank money is always considered optimal for securities settlement. Hence, regulators now have an added urgency to get something like Fnality in play sooner rather than later.

Fnality International’s founding CEO Rhomaios Ram stepped down last year and was replaced by Michelle Neal, who joined from the New York Federal Reserve earlier this month. That appointment should give the central bank considerable peace of mind.

And of course, the Trump administration is very supportive of innovation.

Need for speed

The change in administration has already triggered considerable activity with three major US announcements this week – the ICE stablecoin announcement; Fidelity’s plans to issue a tokenized money market fund and a stablecoin; and the CME will offer a DLT-based solution, most likely to enable tokenized collateral to meet intraday margin requirements. This flurry of activity might be just the start.

Based on the Frankfurt Crypto Asset Conference, it appears to be providing some impetus elsewhere.

Meanwhile, during the conference, Santander’s Luis Nacarino confirmed that three banks are live on the Sterling Fnality Payment System (£FnPS) – Lloyds, Santander and UBS, who made their first transactions six months ago. Fnality first went live 15 months ago.

The Bank of England was keen to make sure that Fnality scaled conservatively. So we asked Fnality whether there were any regulator limits on the number of banks that can participate. The spokesperson responded:

“Fnality is scaling £FnPS operations in a managed and phased approach, ensuring system resilience and functionality in a live environment. This approach meets the operational and supervisory expectations of the Bank of England; any limits set do not relate to the number of banks that are active.” 

“Fnality has a strong pipeline of participants who are onboarding and looking to take advantage of key use cases – spanning repo through margin transactions.” 

We’d also observe that Fnality is an important potential participant in the UK’s Digital Securities Sandbox, which could accelerate matters, particularly as it will host the issuance of the planned digital gilts.

Stepping back, if there are two currencies live by the end of the year, it will open up additional interesting potential use cases for foreign exchange and FX swaps.

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Axis, one of India’s top five banks will use JP Morgan‘s Kinexys Digital Payments (formerly JPM Coin) for cross border payments. Swift payments are invariably constrained by differences in bank opening hours, whereas JP Morgan’s blockchain-based bank accounts are available for 24/7 instant payments.

This is particularly important for large corporates with subsidiaries spread around the world. It means they can send and receive funds instantly, rather than needing to keep buffers of cash to allow for timing differences. Additionally, the solution supports programmable payments.

“We are excited to work with Kinexys by J.P. Morgan to deliver a first in the market – 24/7 programmable USD clearing capability for our Institutional and Commercial Banking clients for their cross-border payments, out of GIFT City (Gujarat International Finance Tech City),” said Neeraj Gambhir, Group Executive & Head- Treasury, Markets & Wholesale Banking Products.”

“With this collaboration, we are bringing significant value to our clients through streamlining payments, unlocking liquidity and above all, adding further optionality on cross-border payments, utilizing blockchain-based payment rails that are fit for growth.”

JP Morgan has been piloting Kinexys in GIFT City since 2023, starting with a sandbox trial with five banks, including Axis. The City aims to compete with other international financial centers such as Singapore and Dubai. Earlier this month it launched a consultation on tokenization.

Meanwhile other banks using Kinexys include Bahrain’s Bank ABC and First Abu Dhabi Bank. The Kinexys blockchain supports various other applications, including tokenized collateral. Total Kinexys transactions have now surpassed $1.5 trillion and average $2 billion daily.

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