Arch Lending Enters Tokenized Equity Loans Market

Crypto lender Arch Lending is set to expand its services by offering loans backed by tokenized equities. According to Himanshu Sahay, co-founder and chief revenue officer of Arch Lending, this move will be in response to the growing demand for credit against these assets.

Sahay pointed out that tokenized equities have seen rapid growth over the past year, with distributed tokenized stock value rising to around $3.15 billion from roughly $630 million a year ago. However, lending against these assets remains limited.

Arch Lending has already ventured into tokenized real-world assets, offering loans backed by Paxos Gold and Tether Gold in recent weeks. Bitcoin (BTC) still dominates the lender's existing loan book, making up more than 80%, while there is growing interest in XRP as collateral, particularly among US borrowers.

This development marks a significant step for the tokenized equities market, which has seen various lenders enter the scene. Ondo Finance launched DeFi lending markets for two of its tokenized ETFs through an integration with lending protocol Morpho in February. Kraken also made 10 xStocks eligible to back futures and margin positions in July.