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Avalanche Allows Tokenised Treasury Holdings to Secure Loans and Trades

Avalanche Allows Tokenised Treasury Holdings to Secure Loans and Trades

ZeroBeta and Lynq enable institutions to pledge tokenised US Treasuries without giving up the interest earned on their holdings.

Written by Rahul Dhingra, Edited by Rohan Pal | Updated: 28 October 2026 19:49 IST

Avalanche Allows Tokenised Treasury Holdings to Secure Loans and Trades

Photo Credit: Unsplash/Shubham Dhage

Lynq uses Avalanche infrastructure to manage the pledging and release of tokenised Treasury assets

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Highlights

Tokenised Treasuries can support loans and crypto trading
Lynq locks pledged assets while they continue earning interest
BlueShift monitors collateral requirements and margin levels

ZeroBeta and Lynq have brought together their institutional systems on the Avalanche blockchain to enable tokenised US Treasuries to be used as collateral for secured lending and crypto asset trading purposes while earning interest. A report dated October 27 said that the tie-up links Lynq's settlement system with ZeroBeta's BlueShift risk management software, which enables banks to make collateralisable asset pledges without moving such assets out of the system. The integration will utilise Lynq's collateral lock function, which keeps assets under escrow as they earn interest.

ZeroBeta and Lynq Combine Risk Management With Blockchain-Based Collateral Settlement

As per the announcement, BlueShift manages collateral requirements and monitors margin, while Lynq handles the actual pledging and release of assets. The companies said the arrangement would allow institutions to access financing and support trading positions using assets they already hold, without having to give up the interest those holdings generate.

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Under this new arrangement, tokenised Treasury holdings can be used for both secured borrowing and margin trading through the same collateral management system. Secured borrowings will see BlueShift instruct Lynq to lock in the Treasury collateral on behalf of the lender. The collateral value is then monitored by the platform against predetermined levels and can make a call to either add more collateral or unlock some of the existing pledge.

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The same principle applies to trading of digital assets, whereby BlueShift determines the margin needed for the existing positions and the new orders. Treasury assets that qualify can be used as collateral for the margin needs, and Lynq executes the instruction directly on its settlement network. These transactions are executed via Lynq's Avalanche infrastructure, thereby ensuring that the pledged assets remain on the same network throughout the transaction.

According to Jerald David, CEO of Lynq, it should not be hard for institutions to either make their asset holdings serve as collateral or continue earning from them at the same time. David indicated that through the collaboration, institutional clients who qualify for holding can hold their assets within Lynq while also utilising them for loan or trading purposes. Varuna Wijesundera, CEO of ZeroBeta, stated that collateral management is among the many real-world uses of tokenised assets for financial institutions.

In April, the US-based crypto exchange, Coinbase, also introduced crypto-backed USDC loans for users in the UK, which allow users to borrow USDC stablecoin against Bitcoin, Ether, and Coinbase Wrapped Staked Ether (cbETH) with up to 3.5 percent APY in USDC rewards automatically integrated for Coinbase One members. Coinbase added that borrowing costs can change frequently, which is why interest rates are variable and are set by Morpho based on market conditions on Base.

Cryptocurrency is an unregulated digital currency, not a legal tender and subject to market risks. The information provided in the article is not intended to be and does not constitute financial advice, trading advice or any other advice or recommendation of any sort offered or endorsed by NDTV. NDTV shall not be responsible for any loss arising from any investment based on any perceived recommendation, forecast or any other information contained in the article.

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Further reading: Crypto Loans, tokenisation Service, Blockchain technology

Rahul Dhingra

Email Rahul Dhingra

Rahul Dhingra is a crypto writer at Gadgets 360, where he covers the exciting world of Cryptocurrency, Blockchain, Defi and Web3. Before joining Gadgets 360, he worked as a content specialist for a European-based Crypto Exchange. Rahul loves storytelling, not just through the written word but also through the visual medium. Beyond his professional life, Rahul is a sports fanatic. Whether it’s cricket or football, his passion for the game is contagious. More