Perspective by: Hedy Wang, co-founder and CEO at Block Street
Equity markets are still operating on outdated systems — batch files, email reconciliations, and slow collateral transfers that drudge through custodians in workflows lacking full control.
If the industry seeks to uphold its credibility, it must no longer accept this reality. Incremental fixes or niche solutions will not suffice. The solution is a shift to onchain equity lending. Real-time settlement, programmable collateral, and transparent rule enforcement will establish the new standard.
Equities depend on aspects like certainty and speed; however, the systems supporting them still cause delays in settlements, stalled recalls, and reconciliation traps during corporate actions.
Onchain frameworks eliminate these frictions by enabling instant and secure trade settlements, thereby removing the delays and risks associated with current processes. Smart contracts can automate routine tasks, minimizing the need for ongoing negotiations.
Global regulators and market architects are laying the groundwork for tokenized settlements supported by central bank money and tokenized deposits. These secure funds represent the “cash” side of transactions — ensuring that financing is safe and final.
Even the World Economic Forum’s overview emphasized the shift in issuance and securities-financing use cases from pilot phases to production, as tokenization transitions from concept to reality. The moment for advancement is now, as necessity drives invention.
Evaluating Risks
Currently, risks within the equity lending system frequently surface too late, often through tedious reconciliations and back-office audits, when the issues have already propagated. Instead of reacting post-trade, proactive rule enforcement ensures loans proceed only under appropriate conditions. This means confirming limits on exposure, recall durations, and other factors beforehand.
The manual exception management can now be eradicated, making the cash aspect more resilient, as indicated in a 2025 study demonstrating that policy execution can be preserved on programmable systems. If monetary operations can be effectively automated, so can the equity finance rule set.
Associated: Tokenized equity still in regulatory gray area
Tokenized reserves, commercial bank money, and government bonds on platforms with conditional, atomic, and programmable settlements were detailed in the BIS report.
The market’s trajectory aligns with a broader consensus emerging this year. Future systems will be defined by tokenized assets and money under public law supervision, moving past the distinction between crypto and fiat.
Regulation as a Gateway, Not a Barrier
Critics view regulation as a stumbling block, but it functions more as a synchronized green light. Europe’s regulated sandbox for blockchain market infrastructure demonstrates this. These live, regulated platforms with genuine exemptions and reporting structures are establishing the groundwork for future equity lending avenues.
They reveal successful models, the legal frameworks supervisors must adhere to, and anticipated regulatory directions. This precisely outlines the structural components required for equity lending to seamlessly transition onto onchain systems.
Nevertheless, the industry faces challenges such as fragmentation and confidentiality that need addressing with due diligence.
These issues can be resolved using permissioned networks that implement Know Your Customer and whitelist protocols, along with Zero Knowledge Proofs to safeguard borrower and owner data and standardized collateral tokens to maintain precise audibility.
Equity lending constrained by outdated batch processes will inevitably falter on two fronts: efficiency of basis and market trust. Delays in settlements not only diminish returns but also heighten counterparty risk, leaving participants exposed at a time when precision should prevail. In contrast, onchain equity lending not only enhances the process; it revolutionizes it by enforcing transparency inherently, reducing systemic risk, and reinstating the genuine time value of capital down to the millisecond.
This is no longer merely theoretical. The market is shifting in this direction. Regulatory frameworks are evolving, pilots have validated the model, and institutional interest is increasing. The choice is now concrete: equity lending must go onchain, or it risks being left behind.
Perspective by: Hedy Wang, co-founder and CEO at Block Street.
This article serves general informational purposes and is not intended as legal or investment advice. The views, thoughts, and opinions expressed here are solely those of the author and do not necessarily reflect the views and opinions of Cointelegraph.
