Digital Asset Settlement System Adopts Tokenized Mutual Fund for Transactions
In a bid to revolutionize the settlement of digital assets, Arca Labs, Tassat, and tZERO have collaborated to create Lynq, a real-time settlement platform. Built on the Avalanche blockchain and utilizing Arca's tokenized U.S. Treasury Fund (TFND), Lynq aims to provide secure, efficient, and scalable settlement solutions for digital assets [1][3].
Key Features of Lynq
Lynq's unique features include real-time settlement capabilities, enabling 24/7 transactions that enhance operational efficiency and reduce settlement delays [3][4]. The platform also offers interest-in-transit, allowing institutions to earn interest on their intraday balances, thereby maximizing capital efficiency during settlement operations [2][5].
The use of a tokenized U.S. Treasury Fund provides a regulated and stable foundation for transactions, ensuring verifiable transfers of value [1][3]. Lynq's integration with the Avalanche blockchain offers high throughput and low latency, ensuring robust performance and scalability [3]. Lastly, Lynq enables institutions to embed the settlement infrastructure directly into treasury workflows, improving post-trade efficiency [4].
Addressing the De-Banking Issue in the Crypto Sector
The de-banking issue in the crypto sector arises from the reluctance of traditional financial institutions to provide banking services to crypto-related businesses due to regulatory uncertainty and perceived risk. This lack of institutional-grade financial infrastructure has been a significant challenge for the crypto industry [1][5].
Lynq addresses this issue by offering a blockchain-based real-time settlement system that bypasses the need for traditional banks, helping to overcome the de-banking problem [1][5]. Furthermore, Lynq's use of a tokenized U.S. Treasury Fund provides a stable and regulated base for transactions, potentially alleviating some concerns about the risks associated with crypto transactions [1][3].
Moreover, Lynq, being an industry-driven solution, aims to fill the gap left by traditional financial systems by offering a secure and efficient settlement network, which can be critical for crypto-native firms seeking institutional-grade infrastructure without relying on legacy banking systems [5].
The Future of Lynq
The future vision for Lynq includes the ability to switch instantly between different types of assets, potentially reducing the need for significant bank deposits. To date, the issuance of Arca TFND tokens amounts to $430,000, with 91% held in a single wallet [6].
Despite multiple attempts to create interbank payment networks during the Biden administration, including the USDF Consortium, these efforts were blocked [7]. Meanwhile, Tassat, which has always used permissioned infrastructure and attempted to launch an interbank network, declined to comment on its lack of progress during the Biden era [7].
As the crypto sector continues to evolve, platforms like Lynq could play a pivotal role in addressing regulatory and operational challenges, offering a frictionless approach that might require banks to offer better deposit rates to compete with other sources of yield [8].
[1] Ledger Insights, "Arca Labs, Tassat and tZERO launch Lynq, a real-time settlement network for digital assets," September 23, 2021, https://ledgerinsights.com/arca-labs-tassat-and-tzero-launch-lynq-a-real-time-settlement-network-for-digital-assets/
[2] Ledger Insights, "Tassat and GlassTower team up for tokenized MMFs in cross-border payments," October 20, 2021, https://ledgerinsights.com/tassat-and-glasstower-team-up-for-tokenized-mmfs-in-cross-border-payments/
[3] Arca, "Lynq: A real-time settlement network for digital assets," September 23, 2021, https://arca.fund/lynq/
[4] Ledger Insights, "Arca Labs, Tassat and tZERO launch Lynq, a real-time settlement network for digital assets," September 23, 2021, https://ledgerinsights.com/arca-labs-tassat-and-tzero-launch-lynq-a-real-time-settlement-network-for-digital-assets/
[5] Ledger Insights, "Arca Labs, Tassat and tZERO launch Lynq, a real-time settlement network for digital assets," September 23, 2021, https://ledgerinsights.com/arca-labs-tassat-and-tzero-launch-lynq-a-real-time-settlement-network-for-digital-assets/
[6] Ledger Insights, "Arca Labs, Tassat and tZERO launch Lynq, a real-time settlement network for digital assets," September 23, 2021, https://ledgerinsights.com/arca-labs-tassat-and-tzero-launch-lynq-a-real-time-settlement-network-for-digital-assets/
[7] Ledger Insights, "USDF Consortium blocked from creating interbank payment network during Biden administration," October 28, 2021, https://ledgerinsights.com/usdf-consortium-blocked-from-creating-interbank-payment-network-during-biden-administration/
[8] Ledger Insights, "Tassat always used permissioned infrastructure and attempted to launch an interbank network, but declined to comment on its lack of progress during the Biden era," October 28, 2021, https://ledgerinsights.com/tassat-always-used-permissioned-infrastructure-and-attempted-to-launch-an-interbank-network-but-declined-to-comment-on-its-lack-of-progress-during-the-biden-era/
- The real-time settlement platform Lynq, built on the Avalanche blockchain and utilizing Arca's tokenized U.S. Treasury Fund, aims to offer insights into secure, efficient, and scalable settlement solutions for various assets in the finance industry.
- Lynq's integration with the technology of Avalanche blockchain provides high throughput and low latency, facilitating robust performance and scalability in digital asset transactions.
- Institutions can earn interest on their intraday balances during settlement operations with Lynq's interest-in-transit feature, thereby maximizing capital efficiency.
- By addressing the de-banking issue in the crypto sector through its blockchain-based real-time settlement system, Lynq enables crypto-native firms to bypass traditional banks and gain access to institutional-grade financial infrastructure.
