TLDR
- Lynq and ZeroBeta announced a partnership on October 27 that lets institutions use tokenized U.S. Treasuries as collateral.
- The assets can back secured loans and margin for digital asset trading while still earning interest.
- ZeroBeta’s BlueShift platform manages risk and margin, while Lynq holds and moves the collateral on Avalanche.
- Lynq holds more than $89 million in assets and has onboarded over 40 institutional firms.
- The companies did not name the first users or disclose any completed transactions.
Lynq and ZeroBeta have linked their platforms on Avalanche so institutions can use tokenized U.S. Treasuries as collateral. The assets can back secured loans and digital asset trades while they continue to earn interest.
The partnership was announced on October 27. It connects Lynq’s settlement network with BlueShift, the risk and collateral management platform built by ZeroBeta.
Institutions can pledge eligible assets without moving them off the network. Lynq said this removes the usual trade-off, where pledged assets stop earning interest while they are locked.
How the Collateral System Works
The setup relies on Lynq’s collateral lock feature. It places assets in escrow while they keep accruing interest.
BlueShift sets terms and monitors margin. Lynq holds the collateral and carries out pledges and releases when BlueShift instructs it to.
For secured borrowing, BlueShift tells Lynq to pledge a tokenized Treasury to a lender. If the collateral value crosses agreed thresholds, BlueShift can ask for more collateral or release part of it.
For digital asset trading, BlueShift calculates the margin needed for open positions and new orders. Eligible Treasury holdings can be pledged to meet those needs.
Pledged assets stay on the same network from start to finish. Interest is calculated and paid in real time through Lynq’s Yield-in-Transit technology.
Lynq CEO Jerald David said institutions “shouldn’t have to choose between using an asset as collateral and continuing to earn interest on it.”
ZeroBeta CEO Varuna Wijesundera said collateral is “one of the most compelling use cases” for tokenized assets. He said the partnership lets institutions use these holdings in daily lending and trading.
Lynq’s Network and Wider Market Activity
Lynq was developed by Arca Labs, Tassat Group and tZERO Group. It is operated by tZERO Securities, an SEC-registered broker-dealer and member of FINRA and SIPC.
Assets on the platform have passed $89 million, and more than 40 institutional digital asset firms have joined. Its collateral lock feature launched in March 2026.
ZeroBeta is based in Canada, with delivery centers in North America, the U.K. and Sri Lanka. BlueShift serves trading firms, investors, clearing houses and depositories.
Other firms are building similar tools. In September, Citi reported that 77% of surveyed financial institutions expected to use some form of tokenized collateral in 2026. Citi also estimated that about 25% of collateral sits idle due to operational barriers.
Earlier in October, BNY and Citadel Securities completed a Treasury financing deal using a tokenized two-year Treasury note. The security settled within minutes and was pledged in an overnight triparty repurchase agreement.
On Avalanche, Aave announced a credit hub in September that would let eligible institutions borrow Tether’s USA₮ stablecoin against approved tokenized assets. In May, VanEck’s tokenized Treasury fund VBILL became available as collateral on Euler lending markets.
The Lynq and ZeroBeta announcement did not name the first institutions using the integration. The companies also did not share borrowing rates, collateral thresholds or the value of Treasuries pledged so far.
