Chainlink has launched CustodySync with Anchorage Digital Bank as its first partner, allowing institutions to borrow from decentralized finance (DeFi) lending markets while keeping their assets in qualified custody.
In an October 26 announcement, Chainlink said CustodySync connects custodians’ collateral systems with onchain lending markets. It coordinates asset balances, pricing, and loan activity throughout the life of a loan.
The system uses Proof of Reserve to publish custody balances onchain, while transfer-restricted receipt tokens represent the collateral within the lending market. These tokens do not provide a claim on the underlying assets outside the integration.
Borrowed funds move directly from the lending market to the borrower. Chainlink’s Runtime Environment coordinates approved actions and updates custody records, while its Data Feeds and Data Streams provide matching prices to both systems.
When a loan reaches its liquidation threshold, an appointed collateral agent manages the sale. CustodySync records the agreed sale proceeds onchain before the final settlement takes place.
Anchorage Digital CEO and co-founder Nathan McCauley said institutions should not have to choose between qualified custody and access to onchain liquidity.
Chainlink said Anchorage’s Atlas Collateral Management product is part of the arrangement, although available features may vary between custodians.
Anchorage’s Atlas documentation explains how the service manages collateral for institutional lending. It separates responsibility for holding assets from monitoring loan positions. An April 28 manual identifies Anchorage Innovations LLC as the typical collateral manager, with its US bank or Singapore entity acting as custodian.
Before a loan is funded, borrowers and lenders sign agreements covering eligible assets, loan-to-value limits, cure periods, and required actions if the terms are breached. Borrowers then deposit collateral into a segregated vault or wallet.
Atlas monitors positions around the clock. If a margin call occurs, the borrower must provide enough additional collateral within the agreed period to restore the required ratio.
Depending on the agreement and the severity of the breach, Anchorage may issue notifications, arrange partial or full liquidation, or transfer collateral to the secured party. A critical threshold can trigger immediate action unless the agreement provides a cure period.
The manual also says Anchorage coordinates liquidations through its trading desks. Participants can monitor their collateral packages through an API and dashboard.
Anchorage already has a separate arrangement with Spark that allows institutions to borrow against Bitcoin held at Anchorage Digital Bank. The company said multiple institutional borrowers had taken out loans through the arrangement, but it did not disclose their identities or the total amount borrowed.
In that setup, Anchorage acts as Spark’s collateral agent, using Atlas to monitor loan-to-value ratios, manage payments and margin calls, and handle liquidations. Borrowers can access Spark’s lending markets while keeping their Bitcoin in qualified custody.
The arrangement separates collateral management from the lending protocol itself. Anchorage handles monitoring and liquidation operations, while Spark operates its own lending markets.
Anchorage has also expanded its institutional access to other crypto financial products.
On October 8, the company joined Sui’s Hashi launch coalition, which announced more than $500 million in capital commitments ahead of a phased mainnet rollout. The initiative offers two institutional access routes: Atlas for firms using qualified custody and the Porto wallet for firms managing their own assets. Hashi is designed to keep deposited Bitcoin on its native network while creating hBTC on Sui for use in financial applications. More than 20 launch partners were involved, with integrations planned across different stages of the rollout.
On September 11, Frgmnt announced access to its fUSD and sfUSD products through Anchorage’s custody infrastructure. Institutions can hold, mint, stake, unstake, and redeem the assets without setting up a separate custody arrangement.
Frgmnt mints fUSD against USDC and deploys the backing across selected lending markets. Institutions seeking returns from those strategies can stake fUSD to receive sfUSD. Both 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.
The company also integrated Lido staking on July 2, allowing institutional clients to mint and burn wrapped staked Ether within its custody platform. The integration keeps staking alongside Anchorage’s governance, reporting, and settlement functions.
Lido’s wstETH represents staked Ether, with staking rewards reflected in its value relative to stETH over time. Anchorage said clients can complete the staking process without moving their assets between separate custody providers.