Chainlink launched a new product called CustodySync on October 26, 2026, teaming up with Anchorage Digital Bank as its initial launch partner. The service connects institutional custody systems with onchain lending markets. Through this integration, institutions can borrow funds from DeFi protocols without having to move assets out of qualified custody.
Anchorage Digital CEO Nathan McCauley highlighted the dilemma institutional investors have long faced: “Institutions should not have to choose between qualified custody and onchain liquidity.”
Onchain Reserve Mechanism and Liquidation Handling
CustodySync’s architecture relies on several core Chainlink components to synchronize data across platforms. Chainlink Proof of Reserve publishes custody balances directly onchain. At the same time, transfer-restricted receipt tokens are minted to represent collateral within the lending market.
The funding flow is designed to move directly without additional intermediaries. Loan proceeds flow straight from the lending market to the borrower. Behind the scenes, the Chainlink Runtime Environment coordinates authorized actions while updating ledger records in the custody system.
Asset valuation needs are handled via market data infrastructure. Chainlink Data Feeds and Data Streams supply synchronized pricing to both systems, spanning both the bank custody side and the onchain lending market.
Risk mitigation procedures are in place to address market volatility. When a loan position reaches its liquidation threshold, a designated collateral agent manages asset sales. CustodySync then posts the committed proceeds directly onchain before final settlement is concluded.
Partnership with Spark for Bitcoin-Backed Loans
Alongside the launch of CustodySync, Anchorage announced a separate collaboration with lending protocol Spark. This arrangement allows institutions to borrow liquidity using Bitcoin held at Anchorage Digital Bank as collateral.
Several institutional borrowers have already begun taking out loans under this new setup. Anchorage identified its Atlas Collateral Management product as a vital component supporting the integration.
In the collaboration with Spark, Anchorage acts as the collateral agent. Through the Atlas platform, Anchorage manages loan-to-value (LTV) monitoring, payment processing, margin calls, and asset liquidation execution if collateral ratios fall below required limits.
This arrangement brings together chartered bank custody standards with the liquidity efficiency of decentralized protocols. For large-scale investors, the facility offers a way to leverage their crypto holdings without giving up the regulatory-mandated oversight of qualified custody.
Reported by crypto.news.
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Disclaimer: This article is for informational and educational purposes only, not financial advice. Cryptocurrency assets are highly volatile and carry significant risk. Always do your own research (DYOR) and never invest more than you can afford to lose.
