Arch Lending eyes tokenized stocks as next collateral market

Arch Lending intends to add tokenized equities to the list of assets it will accept as loan collateral, Arch co-founder and chief revenue officer Himanshu Sahay said on Cointelegraph’s Chain Reaction podcast. Sahay described a growing market for onchain stocks but noted that lending against these tokenized equities is still limited, creating an opening for credit providers. Sahay pointed to tokenized securities issued by firms such as Superstate, Robinhood and Securitize as examples of the expanding supply of onchain equities, and predicted that multiple lenders will begin offering loans secured by those assets. He also said Arch has already begun broadening its collateral types beyond cryptocurrencies by launching loans backed by tokenized precious metals, specifically Paxos Gold and Tether Gold. Despite the planned expansion, Arch’s outstanding loans remain heavily weighted toward crypto, with Bitcoin representing over 80% of the lender’s loan book. Sahay added that Arch has observed rising interest in using XRP as collateral, particularly among U.S.-based borrowers. The move by Arch follows earlier activity in tokenized-equity lending and collateral products. Ondo Finance rolled out DeFi lending markets for tokenized ETFs through an integration with Morpho, and centralized exchanges have enabled tokenized stocks for other margin and futures uses: Kraken made 10 xStocks eligible for futures and margin in July, and Coinbase launched tokenized B20 stocks on the Base network with infrastructure aimed at DeFi borrowing and lending. Data aggregator RWA.xyz shows distributed tokenized stock value rising to about $3.15 billion from roughly $630 million a year earlier, highlighting rapid market growth.