Centrifuge floats converting CFG tokens into equity in new governance proposal

A token built for a different era

@centrifuge has published governance proposal CP172, floating the idea of allowing eligible $CFG holders to convert their tokens into equity shares. The team was direct about its reasoning: the current token structure now limits the institutional partners it can work with and the capital it can attract. The proposal uses the contract address ethereum:0xcccccccccc33d538dbc2ee4feab0a7a1ff4e8a94 to identify eligible holders.

"The CFG token was designed for a different Centrifuge," the team said in the proposal, signalling how far the protocol has moved since the token was first introduced. The publication is framed as a request for comments, not a binding decision, with a 14-day community feedback window now open.

$CFG is the native utility and governance token of the Centrifuge protocol, powering its decentralised operations for real-world asset tokenisation. On March 20, 2025, governance proposal CP149 was passed, introducing a new V3 CFG token consolidated into a single, Ethereum-native ERC-20. CP172 represents a further step in that evolution, this time questioning whether the token model itself remains fit for purpose.

Institutional ambitions outgrowing token constraints

The timing reflects how significantly Centrifuge has repositioned itself. Centrifuge is a multichain real-world asset tokenisation protocol that lets institutions issue onchain pools backed by off-chain assets like US Treasuries, invoices, real estate, royalties, and credit portfolios. The protocol has become the infrastructure standard for institutional-grade private credit tokenisation, with TVL surging to between $1.3 and $1.45 billion as of December 2025, driven by actual deployed institutional capital.

Partners now include major asset managers. Centrifuge partnered with Janus Henderson for a second time to bring its flagship AAA CLO Strategy, JAAA, onchain. That institutional reach appears to be exactly what is straining the existing token framework, with regulated counterparties often facing restrictions on holding or interacting with protocol governance tokens.

Centrifuge's governance process begins on the community forum as a request for comments, with the purpose of gathering input before a proposal moves onchain. If community sentiment supports CP172, a formal onchain vote would follow. The outcome could mark one of the more significant structural pivots in the RWA sector, shifting a major protocol's community ownership model from token-based to equity-based for at least a portion of its holders.

Sources:
Centrifuge Docs: The CFG Token
Centrifuge Docs: Governance Process
CoinDesk: Centrifuge Debuts Asset Tokenization Service