Introduction
As the traditional equity markets grapple with sluggish settlement processes and outdated infrastructures, a new wave of innovation driven by blockchain technology is set to revolutionize equity lending. Onchain settlement systems promise real-time transaction finality, programmable collateral, and enhanced transparency, promising to overhaul the existing risks and inefficiencies. Regulatory progress, coupled with technological advancements, paves the way for a future where tokenized assets and decentralized finance (DeFi) principles form the backbone of efficient, secure equity markets.
- Onchain equity settlement offers instant, secure trade finality, replacing legacy clearing systems.
- Regulators are establishing frameworks for tokenized securities backed by central bank money.
- Automated upfront rules enforcement reduces post-trade risk and manual reconciliation.
- Legal and regulatory infrastructure is evolving to support tokenized assets in mainstream finance.
- Market adoption is accelerating, with pilots demonstrating the viability of onchain equity lending.
Opinion by: Hedy Wang, co-founder and CEO at Block Street
Despite the rapid growth of cryptocurrency and DeFi, traditional equity markets continue to rely on outdated processes—batch files, email reconciliations, and slow collateral movements hinder efficiency and trust. To preserve credibility and meet the demands of modern finance, the industry must embrace onchain equity lending, which offers real-time settlement, programmable collateral, and greater transparency. Such innovation can significantly reduce settlement delays and systemic risks, transforming the infrastructure that underpins global markets.
Current systems depend heavily on manual workflows, leading to settlement friction, stalled recalls, and often, reconciliation traps during corporate actions. Blockchain-based rails, enabled by smart contracts, automate routine tasks, automatically enforce rules, and settle trades instantly and securely. This removes the delays and reduces the counterparty exposure that currently threaten market stability.
Regulators and market architects are laying the groundwork for tokenized settlement systems, backed by central bank digital currencies (CBDCs) and tokenized deposits. These initiatives guarantee secure, final payments on blockchain platforms, ensuring transparency and safety. The BIS report highlights cases of tokenized reserves, government bonds, and commercial bank money on programmable ledgers that enable conditional, atomic settlement.
The transition to this onchain paradigm aligns with an emerging consensus: the future of securities and money lies in tokenized assets governed under public law, where the lines between crypto and fiat blur. Such systems will operate transparently, efficiently, and under regulatory oversight, fostering stability and trust in cryptocurrency markets and beyond.
Weighing up the risks
Today’s equity lending environment often uncovers risks only after the fact, through lengthy reconciliations. But blockchain-based rules enforcement allows potential issues—like exposure limits or recall periods—to be checked proactively, significantly lowering systemic risk. A 2025 study demonstrates that automated monetary policies on programmable rails are feasible, suggesting similar applications for equity finance rules.
Publicly available frameworks, such as the BIS report, describe how tokenized reserves and government bonds can function within regulated, permissioned networks. These networks incorporate privacy measures like Zero Knowledge Proofs to protect sensitive data while maintaining transparency.
Moving away from problematic batch processes enhances both efficiency and market confidence. Delays erode returns and increase counterparty risk—issues that onchain equity lending could address by providing near-instant settlement, systemic risk reduction, and transparency by default. The industry is already witnessing a shift, with regulatory sandboxes, successful pilots, and growing institutional interest indicating that tokenized, onchain securities are poised to become standards rather than exceptions.
As the market’s regulatory landscape develops to support this transformation, the choice becomes clear: adopt onchain equity lending systems or risk being left behind in obsolete practices. The progress is tangible, the benefits substantial, and the timing critical for mainstream adoption.
Opinion by: Hedy Wang, co-founder and CEO at Block Street
This article is intended for informational purposes only and should not be considered legal or investment advice. The views expressed are solely those of the author and do not reflect the opinions of the platform.
