Lynq and ZeroBeta have integrated their institutional systems on Avalanche, allowing tokenized U.S. Treasuries to support secured borrowing and digital asset trading while earning interest. The October 27 announcement connects Lynq’s settlement network with ZeroBeta’s BlueShift risk platform. Institutions can pledge eligible holdings without moving them off Lynq, while BlueShift tracks collateral needs and margin levels.
The partnership combines settlement and risk controls within one process. It also creates two uses for the same type of asset: backing a loan and meeting margin requirements on trading positions.
How can institutions use Treasury holdings as collateral without interrupting interest payments? Lynq’s collateral lock places eligible assets in escrow, while its Yield-in-Transit technology calculates and distributes interest in real time.
For secured borrowing, BlueShift directs Lynq to pledge a Treasury holding in favor of a lender. Lynq then locks the collateral on its settlement network instead of sending the asset to another platform.
BlueShift monitors the pledged value against agreed requirements. If the value or obligation changes, the system can request more collateral or release part of an existing pledge.
The same connection supports digital asset trading. BlueShift calculates margin for open positions and new orders, and Lynq carries out the related collateral instructions.
As a result, eligible tokenized Treasuries can cover loan obligations and trading margin through one management system. The assets remain on Lynq during each pledge, and the lock prevents their simultaneous use for other obligations.
Lynq CEO Jerald David said institutions should not have to choose between pledging assets and receiving interest. ZeroBeta CEO Varuna Wijesundera said the integration brings institutional risk tools into an interest-bearing settlement environment.
Arca Labs, Tassat Group and tZERO Group developed Lynq’s settlement network. tZERO Securities operates the platform as an SEC-registered broker-dealer and a member of FINRA and SIPC. Avalanche supplies its blockchain infrastructure.
Lynq reported more than USD 89 million in assets on its platform and over 40 institutional digital asset firms onboarded. These figures describe the existing network, not collateral pledged through the new integration.
The company introduced its collateral lock feature in March 2026. It lets participants earmark assets for counterparties and exchanges while blocking competing claims on the same holdings.
ZeroBeta’s BlueShift system adds real-time calculations for risk, collateral, liquidity and settlement. The platform serves institutions across traditional and digital markets, including trading firms, clearing houses and depositories.
The partnership follows other efforts to use tokenized securities in financing. In September, Citi reported that 77% of surveyed financial institutions expected to use tokenized collateral during 2026.
Citi also estimated that around 25% of collateral remained idle or earned no interest because operational barriers restricted efficient movement between institutions.
Earlier in October, BNY and Citadel Securities completed a financing transaction backed by a tokenized U.S. government security. Citadel bought a two-year Treasury note through BNY on Tradeweb. The bank represented it on a private ledger, settled it within minutes and later accepted it in an overnight triparty repurchase agreement. BNY supplied cash against the collateral.
Read More: BNY & Citadel Securities Complete First Tokenized Treasury Repo Deal
Avalanche has also attracted related collateral initiatives. Aave announced plans in September for an Avalanche credit hub supporting loans against approved tokenized assets. The proposed hub would let eligible institutions borrow Tether’s USA₮ against tokenized Treasuries, money market funds and private credit. The plan remains subject to governance and risk reviews.
Separately, VanEck’s VBILL Treasury fund became eligible collateral on Euler lending markets in May, using RedStone pricing data.
Lynq and ZeroBeta did not identify initial users or report completed transactions through their new connection. They also disclosed no borrowing rates, collateral thresholds or value of Treasuries pledged. Nor did they quantify interest generated by collateral under the arrangement.
The Lynq and ZeroBeta integration connects tokenized Treasury collateral with secured borrowing and margin management on Avalanche. BlueShift monitors requirements while Lynq locks eligible assets and maintains interest accrual. The companies have not disclosed initial users, completed transactions, borrowing terms or the value of assets pledged through the partnership.