Arch Lending plans to launch loans backed by tokenized stocks, aiming to expand its collateral options beyond cryptocurrencies as demand for on-chain stocks grows.

Co-founder and CRO Himanshu Sahay stated that the market for tokenized stocks has grown rapidly, while lending against these assets remains limited. He expects new lenders to enter the space and pointed to issuers of tokenized securities, including Superstate, Robinhood, and Securitize.

Arch has launched loans backed by Paxos Gold and Tether Gold

The company has already moved beyond cryptocurrencies, having launched loans backed by tokenized gold—Paxos Gold and Tether Gold—in recent weeks, according to Sahay.

BTC accounts for over 80% of the portfolio; interest in XRP is rising

According to Sahay, more than 80% of Arch’s active loan portfolio is backed by Bitcoin (BTC). He added that the company is seeing increased demand for using XRP as collateral, particularly among borrowers in the United States.

Tokenized stocks included in lending products; market size about $3.15 billion

Tokenized stocks and ETFs are already being used in lending. In February, Ondo Finance integrated markets for two of its tokenized ETFs—versions of SPDR S&P 500 and Invesco QQQ—into the Morpho lending protocol as collateral on Ethereum. In July, Kraken made 10 xStocks eligible as collateral for futures and margin positions, and in August, Coinbase B20 shares launched on the Base network with price feed infrastructure for scenarios including DeFi loans and lending.

According to RWA.xyz, the total value of distributed tokenized stocks has grown to approximately $3.15 billion from about $630 million a year earlier.