Chainlink launches CustodySync for institutional DeFi lending

• Chainlink has launched CustodySync, connecting institutional clients at qualified custodians to decentralised finance lending markets without moving assets out of custody.
• Anchorage Digital Bank is the launch partner, with its Atlas Collateral Management product supporting collateral monitoring and loan management.
• The system targets a market with about US$700 billion in digital assets under custody and more than US$80 billion in DeFi lending deposits.

Chainlink has launched CustodySync, enabling institutions to borrow against custodied digital assets while retaining existing custody arrangements.

The system connects qualified custodians with decentralised finance lending markets, addressing barriers between institutional custody systems and onchain lending protocols.

“Institutions should not have to choose between qualified custody and onchain liquidity,” Anchorage Digital Chief Executive and co-founder Nathan McCauley said in a statement.

Anchorage Digital Bank, N.A., is the first qualified custodian to adopt CustodySync, using its Atlas Collateral Management product to support institutional lending access.

The system uses Chainlink Proof of Reserve to publish verifiable custody balances and restricted receipt tokens to represent collateral in lending markets.

Chainlink Data Feeds and Data Streams provide consistent pricing across onchain lending protocols and custodians’ internal systems, helping align loan-to-value calculations.

Chainlink estimates digital assets under custody total about US$700 billion, compared with US$80 billion in DeFi lending deposits and more than US$30 billion in active loans.

CustodySync expands institutional access to decentralised lending, although adoption will depend on custodians and lending markets integrating the system.