Frontier AdoptionEvidence-graded tracking of what's actually live

Use cases

Securities lending

Lending securities against collateral, with the loan and its collateral recorded on a ledger.

Live (limited) 3

Why tokenise?

Draft analysis · not yet reviewed by the editor · updated 12 Oct 2026. The flows below are simplified for general understanding. Real implementations vary a great deal and are often far more complex.

Investors such as pension funds lend their shares and bonds to banks for a fee, against collateral. Today lender and borrower each keep their own records of every loan and spend hours matching them up. A shared ledger gives both sides one record of the loan and can swap the securities and the collateral at the same moment. Live use is still small: a few banks on a handful of platforms.

Improves an existing process Securities lending is a large, long-established market and already heavily automated. Tokenisation does not create the market; it replaces two sets of matching records with one shared record and lets the loan and its collateral settle together. The value is mostly in fewer breaks and less risk, not in a new product.

The problem today

  • Each side records the loan in its own systems. When a fee or rate changes and only one side updates, the records stop matching, and operations staff, sometimes traders too, spend hours fixing these breaks.[1]
  • The market is big, so these frictions add up across many trades.EquiLend alone handled about $2.8 trillion of transactions a month (2023)[2]
  • Shorter settlement cycles squeeze lenders. When a lent security is sold, the lending agent must find other stock or recall it from the borrower in time, and late returns can cause trade fails. Getting recall information out fast enough is a key problem.[2]
  • Collateral sits in separate markets and custodians, borrowers often post cash that ties up liquidity, and post-trade reconciliation can cost more than a trade is worth.[3]
  • Practitioners at the Bank of England's lending committee blamed rigid, outdated systems for collateral fails and noted that cash is hard to move within the day.[4]

Today vs tokenised (simplified)

End to end: 1 to 2 days to settle, plus daily reconciliation for the life of the loan one shared record from the start; simultaneous swap where both legs are on the ledger · No source gives measured before-and-after timings for securities lending.

Todayend to end: 1 to 2 days to settle, plus daily reconciliation for the life of the loan
  1. Lending agent and borrowerAgree a loan of securities, its fee and the collateralminutes
  2. Both firmsEach book the loan in its own systems and send it to a matching servicesame day removed
  3. Custodians and depositoriesSettle the securities and the collateral as separate legs1 to 2 days removed
  4. Operations teamsReconcile fees, rates and collateral daily and fix breaks between the two recordshours each day, for the life of the loan removed
  5. Lending agentRecall the securities when the lender sells them, and wait for their returna settlement cycle
Tokenisedend to end: one shared record from the start; simultaneous swap where both legs are on the ledger
  1. Lending agent and borrowerAgree the loan on a platform that writes it to one shared recordminutes
  2. Shared ledgerKeeps rate changes, recalls and returns in step for both sidesas they happen
  3. Shared ledgerWhere the securities and collateral are tokenised, swaps them in one step at an agreed timeat the agreed time

Benefits · 6, of which 3 evidenced

Fewer reconciliations[5]

Lender and borrower see the same record of each loan, including later changes such as rate resets, so there is less to match and fewer breaks to fix.

EvidencedMeaningfulAs networks grow

Hundreds of millions of dollars a year in possible industry savings (Vy Solutions estimate, 2022, cited by EquiLend) Operator-reported[5]

Needs counterparties on the ledger

  • EquiLend 1Source securities lending ledger: Since October 2025 BNY and National Bank of Canada have traded securities loans on 1Source, where both sides work from one shared record of each loan instead of keeping separate books and reconciling them. EquiLend says this removes downstream reconciliation and trade breaks, but has published no measured reduction in breaks or volumes.[5]
Atomic settlement (DvP and PvP)[6]

The lent securities and the collateral can change hands together, so neither side is left holding nothing while the other leg settles.

EvidencedMeaningfulAvailable now

Over €1 billion notional of agency securities lending settled delivery-versus-delivery on HQLAX (2024) Operator-reported[6]

Needs counterparties on the ledgerNeeds cash on the ledgerNeeds smart contracts

  • HQLAX and Deutsche Börse collateral basket swaps (Eurex Repo): In the first live trades in December 2019, UBS swapped a basket of German government bonds for a basket of corporate bonds with Commerzbank, and later with Credit Suisse, as a single delivery-versus-delivery exchange of ownership recorded on the HQLAX registry. Neither basket had to be sent through a separate settlement system for the swap to complete.[7]
Less counterparty and settlement risk[6]

With loan and collateral moving at once, the intraday credit exposure of staggered settlement falls away.

Theory · low confidenceMeaningfulAvailable now

Needs counterparties on the ledgerNeeds cash on the ledger

Collateral mobility[7]

Collateral at different custodians can be reassigned to a loan by changing ownership on the ledger rather than moving the securities.

EvidencedMeaningfulAvailable now

Needs counterparties on the ledgerNeeds connected ledgers

  • HQLAX and Deutsche Börse collateral basket swaps (Eurex Repo): One of the first live swaps, in December 2019, moved ownership of a basket of German government bonds held at Euroclear Bank to a counterparty whose collateral sat at Clearstream, without the securities themselves moving between the two depositories. Deutsche Börse's trusted third party linked the custodians to the registry. No timings or volumes were published.[7]
Real-time transparency and audit trail[2]

When a lender sells and recalls a loan, the recall is visible on the shared ledger straight away, which matters more as settlement cycles shorten.

Theory · low confidenceMarginalAs networks grow

Needs counterparties on the ledger

Capital and liquidity efficiency[3]

If securities and collateral swap simultaneously, borrowers need not pre-fund with cash collateral, freeing capital and intraday liquidity.

Theory · low confidenceMeaningfulAs networks grow

Needs counterparties on the ledgerNeeds cash on the ledgerNeeds regulatory change

Where it is now

3 tracked deployments, 3 live. 3 of 6 benefits evidenced in production.

Live (limited) 3

The full potential

If most lenders, agents and borrowers shared one ledger for loan records, and securities and collateral were tokenised too, a loan could be agreed, settled, repriced and recalled from one record, with far fewer breaks and fails. That matters more as the US is on T+1 and the EU follows in 2027. Today the shared-record model is just going live and settlement on the ledger remains a niche.

  • Most counterparties on the same shared record, since its value grows with each one that joins
  • Tokenised securities and collateral, or links to depositories, so settlement can happen on the ledger
  • Cash that can move within the day, such as tokenised deposits
  • Legal and regulatory certainty over ownership recorded on a ledger

Who it suits

Bank, Broker-dealer or market maker, Specialist digital asset custodian, Asset manager, Investor (VC or PE) · effort: medium · value depends on counterparties joining

  • Connection to a shared lending platform such as 1Source
  • Back-office systems that can read from the shared record
  • For on-ledger settlement: securities and collateral at linked custodians or tri-party agents

Limits and open questions

  • Adoption is early. 1Source went live with two banks in October 2025 and has published no volumes; its benefits grow only as more firms join.[5]
  • Practitioners saw legal and regulatory uncertainty over ledger-based ownership, not the technology, as the main obstacle.[4]
  • The benefits have not been measured independently.[3]
  • Securities lending and repo are exempt from the EU's T+1 rule, so the regulatory push for faster settlement is weaker here.[8]

Deployments

DeploymentStatusAssetsUse casesLast reviewed
DTCC Tokenization ServiceUpdated 7 Nov 2026
DTCC ComposerX
Live (limited)
Debt securityEquityFund interest
Collateral mobilitySecurities lendingRepoDelivery versus payment (DvP)Delivery versus delivery (DvD)CCP margin
Reviewed 1d ago
EquiLend 1Source securities lending ledgerUpdated 18 Oct 2026
EquiLend
Live (limited)
Undisclosed
Securities lending
Reviewed 13d ago
HQLAX and Deutsche Börse collateral basket swaps (Eurex Repo)Updated 7 Nov 2026
HQLAX Digital Collateral Registry
Live (limited)
Debt securityEquity
Securities lendingCollateral mobilityRepo
Reviewed 13d ago

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Sources

  1. [1]EquiLend lets DLT-based shared truth replace reconciliations — PostTrade 360, 18 Aug 2022. Accessed 12 Oct 2026.C
  2. [2]https://www.ledgerinsights.com/equilend-role-for-dlt-t1-securities-lending/ — Ledger Insights, 29 Jun 2023. Accessed 12 Oct 2026. Paywalled after the opening paragraphs; only the visible part was read..C
  3. [3]https://www.garp.org/risk-intelligence/market/securities-lending-repo-060223 — GARP, 2 Jun 2023. Accessed 12 Oct 2026.C
  4. [4]Minutes of the Securities Lending Committee meeting, November 2022 — Bank of England, 27 Jan 2023. Accessed 12 Oct 2026.A
  5. [5]EquiLend's 1Source Goes Live With BNY and National Bank of Canada. Additional Counterparties to Follow — EquiLend (via PR Newswire / AAP), 15 Oct 2025. Accessed 12 Oct 2026.B
  6. [6]HQLAX Sec Lending DLT Platform Surpasses €1bn Milestone — Markets Media, 2024. Accessed 12 Oct 2026.C
  7. [7]Deutsche Börse takes collateral swapping live on DLT — PostTrade 360, 9 Dec 2019. Accessed 12 Oct 2026.C
  8. [8]Shorter settlement cycle — European Commission, 3 Jul 2025. Accessed 12 Oct 2026.A