Securities lending platform EquiLend has made a strategic investment in Digital Prime Technologies, though terms were not disclosed. Digital Prime provides Tokenet, a matchmaking service that enables institutional crypto lending, with users including EDX Markets (backed by Citadel Securities, Schwab), Hidden Road and Xapo. Additionally, Digital Prime offers a white-labelled crypto prime brokerage solution. EquiLend provides a similar lending solution for traditional finance, processing more than $4 trillion in monthly transactions. EquiLend wants to work with Tokenet to enable trading, post trade and data workflows for tokenized securities and crypto.
Last week’s SEC approval for the DTCC to engage in tokenization adds urgency to this partnership, as EquiLend needs to support tokenized and digital securities lending.
EquiLend’s clients include many of the world’s largest banks, and this collaboration will also make it easier for those banks to engage in crypto lending. Earlier this week the Office of the Comptroller of the Currency (OCC) said that banks can act as riskless principals for crypto transactions. If the bank borrows crypto from one client and immediately lends it to another, technically the bank is not exposed to any crypto volatility. However, they are exposed to counterparty and other risks.
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