Chainlink has introduced CustodySync with Anchorage Digital Bank as its launch partner, giving institutions a way to borrow from decentralized lending markets against assets held in qualified custody.
Summary
- Chainlink has introduced CustodySync to connect institutional assets held in qualified custody with DeFi lending markets.
- Anchorage Digital Bank is the launch partner, using Atlas to manage collateral and loan operations.
- Transfer-restricted receipt tokens represent custodied collateral onchain, while Chainlink supplies matching prices to both systems.
- Appointed collateral agents handle liquidations, with CustodySync recording committed sale proceeds onchain before final settlement.
Chainlink said in its Oct. 26 announcement that CustodySync connects custodians’ collateral systems with onchain lending markets, coordinating balances, prices, and loan activity throughout a loan’s life.
Chainlink CustodySync connects custody records with lending markets
In Chainlink’s design, Proof of Reserve publishes custody balances onchain, while a transfer-restricted receipt token represents the collateral inside the lending market. The token carries no claim on the underlying assets outside that integration.
Borrowed funds move directly from the lending market to the borrower. Chainlink’s Runtime Environment coordinates authorized actions and updates custody records, while Data Feeds and Data Streams supply matching prices to both systems.
When a position reaches its liquidation threshold, the appointed collateral agent handles the sale. CustodySync records committed proceeds onchain before final settlement.
Nathan McCauley, Anchorage Digital’s CEO and co-founder, said:
“Institutions should not have to choose between qualified custody and onchain liquidity.”
Chainlink identifies Anchorage’s Atlas Collateral Management product as part of the arrangement. Its announcement says available features may differ between custodians.
Atlas agreements set collateral thresholds and liquidation responses
Anchorage’s Atlas Collateral Management Manual describes an agency service for institutional lending, with separate responsibilities for holding collateral and monitoring the transaction. The April 28 document identifies Anchorage Innovations LLC as the typical collateral manager and names its U.S. bank or Singapore entity as custodian.
Before funding, the borrower and lender sign bilateral agreements and provide eligible assets, loan-to-value thresholds, cure periods, and required responses. The borrower then deposits collateral into a segregated vault or wallet, according to the manual.
Atlas monitors positions around the clock. A margin call requires the borrower to supply enough collateral within the agreed cure period to restore the required ratio.
Anchorage’s documentation lists several possible responses when a threshold is breached, including notification, partial liquidation, full liquidation, or transfer of the collateral to the secured party. A critical threshold can trigger immediate action unless configured cure-period protection applies.
The manual says Anchorage coordinates liquidations through its trading desks. Participants can monitor their collateral packages through an API and dashboard.
Anchorage’s Spark arrangement already supports custodied Bitcoin loans
In a separate announcement, Anchorage described an existing collaboration with Spark that lets institutions borrow against Bitcoin held at Anchorage Digital Bank. The company said multiple institutional borrowers had drawn loans through that arrangement, without disclosing their identities or the aggregate amount.
Anchorage acts as Spark’s collateral agent, handling loan-to-value monitoring, payments, margin calls, and liquidations through Atlas. The company said borrowers could access Spark’s lending markets while their Bitcoin remained in qualified custody.
Spark’s arrangement assigns collateral operations to Anchorage, according to the announcement. Lending protocols can use the custodian’s monitoring and liquidation infrastructure while operating their own lending markets.
McCauley said institutional borrowers wanted access to crypto lending liquidity alongside the custody controls and operational processes they already used. Anchorage described the collaboration as a structure for serving borrowers unwilling to move their collateral fully into onchain lending contracts.
The Spark announcement identifies Bitcoin as the pledged asset and says collateralization is monitored in real time.
Anchorage has built separate routes into lending and staking
On Oct. 8, crypto.news previously reported that Anchorage had joined Sui’s Hashi launch coalition, which announced more than $500 million in capital commitments ahead of a phased mainnet rollout.
Sui described two institutional access routes through Anchorage. Atlas would serve institutions using qualified custody, while the Porto wallet would provide access for firms managing their own assets. Hashi’s design keeps deposited Bitcoin on its native network and creates hBTC on Sui for use in financial applications.
The commitments came from more than 20 launch partners. Sui’s announcement described planned deployment during a phased rollout, with partners completing their integrations at different stages.
A Sep. 11 announcement from Frgmnt described access to fUSD and its sfUSD staking product through Anchorage’s custody infrastructure. Frgmnt said institutions could hold, mint, stake, unstake, and redeem the assets without establishing a separate custody arrangement.
Frgmnt mints fUSD against USDC and deploys the backing across selected lending markets. Holders seeking rewards from those strategies can stake fUSD for sfUSD, according to the company. The products operate on Base, Coinbase’s Ethereum layer-2 network.
Anchorage Digital Bank operates under a federal charter and is supervised by the Office of the Comptroller of the Currency.
On July 2, Anchorage integrated Lido staking, allowing institutional clients to mint and burn wrapped staked Ether within its custody platform.
The integration kept staking activity alongside Anchorage’s governance, reporting, and settlement functions. Lido’s wstETH represents staked Ether and remains transferable, with staking rewards reflected in its value relative to stETH over time. Anchorage said clients could complete the staking process without moving their assets between separate custody providers.
