Arch Lending plans tokenized stock-backed loans as onchain equity collateral market expands

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Arch Lending tokenized stock loans

Highlights

Arch Lending plans to launch tokenized equity-backed loans soon, addressing limited lending products despite market growth and expanding from crypto to real-world asset collateral.
Ongoing sector momentum includes Ondo Finance's February launch of DeFi lending for tokenized ETFs and additional products from Kraken and Coinbase supporting tokenized stocks as collateral.
Tokenized equities’ distributed value has surged to $3.15 billion from $630 million year-over-year, highlighting rapid adoption and growing collateralization opportunities for lenders.

Expansion plan targets emerging collateral segment

As reported by Cointelegraph, Arch Lending is preparing to enter the tokenized equity lending market as demand builds for credit backed by onchain stocks. Arch co-founder and chief revenue officer Himanshu Sahay says the company plans to launch the offering "pretty soon," arguing that lending products tied to tokenized shares remain limited despite rapid market growth over the past year.

Sahay points to tokenized equities issued by Superstate, Robinhood and Securitize as evidence that the market is broadening and says multiple lenders are likely to participate over time. He also says Arch has already expanded beyond cryptocurrencies into tokenized real-world assets, recently launching loans backed by Paxos Gold and Tether Gold.

Even so, crypto remains the core of Arch's current business. Sahay says Bitcoin accounts for more than 80% of the lender's existing loan book, while interest in XRP as collateral is rising, particularly among U.S. borrowers.

Tokenized equity lending gains industry momentum

Arch is entering a market that is already beginning to develop across decentralized finance and crypto trading platforms. In February, Ondo Finance launched DeFi lending markets for two tokenized ETFs through an integration with Morpho, allowing tokenized versions of the SPDR S&P 500 ETF and Invesco QQQ to be used as collateral for borrowing on Ethereum.

Other exchanges are also building collateral use cases around tokenized stocks. Kraken made 10 xStocks eligible to back futures and margin positions in July, while Coinbase's B20 stocks launched on Base in August with price-feed infrastructure designed to support uses including DeFi borrowing and lending.

The broader tokenized equities market is also growing quickly. According to data from RWA.xyz cited in the report, distributed tokenized stock value has climbed to about $3.15 billion from roughly $630 million a year earlier, reinforcing the case for lenders seeking new collateral categories.

In our earlier article, we covered how U.S. regulators moved to shape digital-asset oversight after the Clarity Act stalled in the Senate. We noted that the SEC and CFTC began advancing rules under existing authority, including an SEC order that facilitates trading in certain tokenized stocks, as the industry pressed for clearer standards to support growth and integration with traditional finance.

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