Arch Lending has added PAX Gold and Tether Gold to its accepted collateral list for crypto-backed loans, accepting both tokenized gold products at up to 75 percent loan-to-value, according to an announcement posted September 1.
The move expands Arch's collateral menu beyond native cryptocurrencies into real-world assets. Anchorage Digital, a institutional crypto custodian, handles custody of the tokenized gold. PAX Gold trades under the ticker PAXG; Tether Gold trades as XAUT. Both are issued on Ethereum and represent physical gold bars held in vaults.
Arch Lending is a crypto lending protocol that originated as the lending arm of the Arch blockchain development initiative. The protocol allows borrowers to post cryptocurrency or now tokenized commodities as security for loans denominated in stablecoins or other assets. The 75 percent LTV cap means a borrower who posts $100,000 in gold tokens can borrow up to $75,000 against them.
Tokenized gold products have grown as institutional allocators and protocols seek exposure to precious metals without holding physical bars. PAXG and XAUT each represent one fine troy ounce of London Good Delivery gold stored in audited vaults. Both products settle on Ethereum and can be transferred peer-to-peer, making them portable collateral across DeFi protocols.
Arch's decision to accept both products at the same LTV reflects confidence in their custody and redemption mechanics. Tether Gold launched in 2020 as Tether's foray into physical commodity tokenization. PAX Gold followed a similar model after Paxos obtained regulatory approval to custody precious metals through its Trust subsidiary.
The collateral expansion comes as institutional crypto lending has stabilized after the 2023 wave of protocol failures. Lenders are now broadening eligible collateral pools to compete for larger corporate borrowers seeking diverse asset classes in loan agreements.
