Birch Hill has raised $2.5 million in a pre-seed funding round led by ParaFi Capital and Castle Island Ventures. The firm is focused on building institutional-grade infrastructure to bridge the gap between traditional finance and the growing on-chain credit market.

The raise comes as the market for Real World Assets (RWAs) reaches a reported $20 billion in supply. While the opportunity is significant, a lack of robust infrastructure has remained a key barrier to entry for institutional participants. Birch Hill aims to solve this by creating a "translation layer" for institutions to access and manage on-chain credit.

This investment signals growing venture interest in the picks-and-shovels plays that are essential for maturing the digital asset ecosystem. By addressing the core infrastructure needs, Birch Hill is positioning itself to facilitate the broader movement of credit, a cornerstone of the global financial system, onto blockchain rails.