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Arch Lending Targets Tokenized Stocks As Next Big Collateral Market

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Arch Lending Targets Tokenized Stocks As Next Big Collateral Market
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  • As onchain stocks gain popularity, Arch Lending intends to provide loans secured by tokenized stocks.
  • According to co-founder Himanshu Sahay, Arch anticipates entering the tokenized equity lending market in the near future.
  • XRP is becoming more and more popular as loan collateral, especially among US borrowers. The value of tokenized equity has increased from about $630 million a year ago to approximately $3.15 billion.

Arch Lending plans to expand into tokenized equity-backed loans as onchain stocks gain traction and lenders look for new ways to unlock liquidity from real-world assets.

Crypto lender Arch Lending is preparing to enter the tokenized equity lending market, adding blockchain-based stocks to the collateral it accepts for loans.

Arch co-founder and Chief Revenue Officer Himanshu Sahay said on Cointelegraph’s Chain Reaction podcast that the company plans to enter the market “pretty soon.” He pointed to growing demand for credit products backed by tokenized stocks as the asset class expands.

Tokenized Stocks Become New Loan Collateral

Sahay said tokenized equities have grown rapidly over the past year, while lending options for these assets remain relatively limited. He expects more lenders to enter the market as tokenized stocks become more established.

The market includes tokenized equity products from companies such as Superstate, Robinhood and Securitize. For Arch, adding these assets could broaden its lending business beyond traditional crypto collateral.

Arch has already started expanding into tokenized real-world assets. According to Sahay, the lender recently introduced loans backed by Paxos Gold and Tether Gold.

Crypto assets, however, continue to dominate its loan portfolio. Bitcoin accounts for more than 80% of Arch’s existing loan book, while Sahay said demand for XRP as collateral has also increased, particularly among US borrowers.

Ondo, Kraken & Coinbase Push Tokenized Assets Forward

Arch would not be the first platform to connect tokenized equities with lending and collateral markets.

Ondo Finance has already brought tokenized ETFs into DeFi lending through Morpho. Its SPYon and QQQon products can be used as collateral to borrow USDC, creating a way for holders to access liquidity without selling their tokenized securities.

Tokenized equities are also expanding into other financial applications. Kraken has made selected xStocks eligible as collateral for futures and margin positions, while Coinbase has brought tokenized stocks to Base with infrastructure designed to support onchain financial applications.

The trend reflects a broader shift toward making tokenized securities more useful beyond simply representing traditional assets on a blockchain.

Stay informed with the latest trends in Web3, blockchain innovation, and cybersecurity updates at 3verseTV

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