How EquiLend and Digital Prime Aim to Connect $40T Lending Pool with Tokenized Markets

EquiLend, a leading post-trade services provider in securities lending, has partnered with Digital Prime to integrate its Tokenet platform, aiming to link the $40 trillion global securities lending market with tokenized financial markets. This collaboration seeks to introduce regulated stablecoin collateral into securities lending, potentially enhancing transparency and efficiency in a traditionally opaque and complex market.

What happened

EquiLend, which is backed by a consortium of major financial institutions including BlackRock, Goldman Sachs, and JP Morgan, announced a partnership with Digital Prime to integrate Tokenet, Digital Prime’s regulated stablecoin collateral platform. Tokenet is designed to facilitate tokenized lending and borrowing transactions using fiat-backed stablecoins within a compliant framework. The platform operates under the regulatory oversight of the New York State Department of Financial Services (NYSDFS), where Digital Prime holds a limited purpose trust company license responsible for issuing and managing its stablecoins.

The integration aims to enable institutional investors and participants in the securities lending market to use these regulated stablecoins as collateral. According to CoinDesk reporting and independent analysis by Deloitte, this could introduce greater transparency through real-time tracking and immutable records of collateral flows on blockchain-based ledgers. Deloitte’s report highlights that using regulated stablecoins in securities lending may reduce settlement risk and improve collateral management efficiency.

Morgan Stanley’s recent research note acknowledges growing institutional interest in tokenized collateral solutions but emphasizes that regulatory frameworks and interoperability between legacy financial systems and blockchain platforms remain significant challenges. Analysts interpret EquiLend’s move as a strategic effort to bridge traditional finance (TradFi) securities lending infrastructure with emerging tokenized finance, potentially unlocking liquidity and operational efficiencies in the $40 trillion lending market.

Why this matters

The partnership between EquiLend and Digital Prime could mark a notable step in integrating tokenized assets into mainstream institutional finance. Securities lending is a critical yet traditionally opaque segment of global capital markets, with an estimated $40 trillion in assets under management controlled by EquiLend’s consortium. Introducing regulated stablecoins as collateral could enhance transparency by enabling real-time, auditable collateral flows, which may reduce counterparty risk and improve risk management practices.

By leveraging blockchain-based stablecoins, the integration could address longstanding inefficiencies in collateral management, such as settlement delays and reconciliation challenges. Deloitte’s analysis suggests that tokenized collateral can provide immutable and transparent records, potentially reducing operational risks. This is significant in an environment where regulatory scrutiny on collateral and settlement practices is increasing.

Moreover, the involvement of well-established financial institutions backing EquiLend signals a growing institutional openness to explore tokenized finance solutions. If scalable and compliant, this integration could accelerate adoption of blockchain-based collateral in securities lending, a market that has historically been resistant to technological disruption.

What remains unclear

Despite the confirmed partnership and strategic intent, several important details remain undisclosed or insufficiently explained. The exact technical and operational mechanisms for integrating EquiLend’s existing securities lending infrastructure with Digital Prime’s Tokenet platform are not publicly detailed. This leaves questions about how legacy systems and blockchain-based platforms will interoperate in practice.

Regulatory approvals and compliance requirements for institutional use of Tokenet stablecoins as collateral are only partially addressed. While Digital Prime is regulated by NYSDFS, it is unclear what additional regulatory clearances or ongoing compliance obligations EquiLend and its clients must satisfy to use Tokenet stablecoins within securities lending transactions.

The research brief does not address how market participants will manage liquidity risks associated with stablecoins, especially during periods of market stress or volatility. Similarly, contingency plans related to stablecoin issuer solvency or changes in regulatory status have not been disclosed.

Finally, it is not specified whether the integration will cover the full breadth of the $40 trillion lending market or be limited to select asset classes, geographic regions, or subsets of securities lending activity.

What to watch next

Further disclosures on the technical integration framework between EquiLend’s securities lending infrastructure and Digital Prime’s Tokenet platform.
Regulatory updates or approvals related to the use of Tokenet stablecoins as collateral by institutional investors within securities lending transactions.
Market participant feedback and adoption metrics once the integration is operational, particularly regarding collateral management efficiency and transparency.
Developments addressing liquidity risk management for stablecoins in securities lending, especially during market stress scenarios.
Clarification on the scope of asset classes and geographic coverage included in the EquiLend–Digital Prime integration.

While EquiLend’s partnership with Digital Prime represents a clear effort to modernize securities lending through tokenized collateral, significant operational, regulatory, and risk management questions remain. The evolution of this integration will be important to monitor as it may influence broader institutional adoption of tokenized finance solutions in traditionally conservative markets.

Source: https://www.coindesk.com/business/2025/12/17/tradfi-giant-equilend-backs-digital-prime-to-link-usd40-trillion-pool-with-tokenized-markets. This article is based on verified research material available at the time of writing. Where information is limited or unavailable, this is stated explicitly.