Arch Lending's tokenised-gold loans, assessed on what a 90% liquidation threshold assumes

Gold in a vault has no liquidation threshold. A token representing it does. Between metal and loan sit an issuer, a redemption process and a set of trading venues; a lender enforcing a threshold sells into those venues, not into the London fix.

Arch Lending, which lends as ChainFi, Inc., began accepting PAX Gold and Tether Gold as collateral on 1 September 2026, per the firm’s release of that date. This grades disclosure and mechanism, not desirability. Every figure is from that release, re-read on 3 September, unless otherwise attributed; the loan-to-value arithmetic is this desk’s own.

What the release publishes

The advance rate is the review

The arithmetic runs off the published numbers. At a 75% opening advance, collateral has to fall roughly 11.8% in dollar terms to reach an 85% margin call, and roughly 16.7% to reach the 90% line. That is the entire buffer at the maximum advance.

Arch’s published ladder for its other collateral, read on 3 September, opens bitcoin at 60%, ether at 55%, and solana and XRP at 45%; the gold line, at 75%, carries the highest opening advance on the platform.

What a 90% threshold promises, and what it does not

A 24-hour cure window and partial-only liquidation are real protections. They are promises about how a sale will be conducted, not that there will be a bid.

At 90% the cushion is ten points of collateral value, and clearing the position means selling into whatever depth exists that hour. The release cites CoinGecko for $90.7 billion of tokenised-gold spot volume in Q1 2026 against $84.64 billion in all of 2025 — real growth, and still turnover rather than depth at the book.

The larger gap is upstream. Nothing in the release names the price source valuing the pledged tokens. Arch’s help centre, as read here, puts the partial-liquidation fee at typically 2% of the amount liquidated, subject to state law, and starts the 24-hour clock at the margin call, though its collateral list does not yet name the gold tokens. If the feed pricing the collateral reads a token’s traded price rather than a metal benchmark, a dislocation confined to one issuer can walk a position to 90% while gold has not moved.

Two tokens, one collateral line

The release treats the pair as one class; they are two issuers with two sets of plumbing. Per Arch, each PAXG token is one fine troy ounce from an LBMA-accredited London Good Delivery bar in Brink’s vaults, and each XAUT one ounce from a Good Delivery bar in Swiss custody, issued by Paxos Trust Company and TG Commodities Limited. Paxos publishes its side: monthly attestations, no storage fee, redemption for bars or cash. No statement of XAUT’s vaulting and redemption terms from Tether itself was in the material this desk could open, so the two regimes are not set side by side here — only Arch’s description of both.

The charter and the policy

Arch describes collateral as custodied by Anchorage Digital N.A., “a federally chartered bank”. The OCC’s announcement of 13 January 2021 records a conditional approval converting Anchorage Trust Company into a national trust bank under an operating agreement setting capital, liquidity and risk-management expectations. That is a fiduciary and custody charter. Anchorage’s own site disclosure adds that assets held in custody are not guaranteed by Anchorage and carry no FDIC or SIPC protection, so nothing a borrower pledges becomes an insured deposit by sitting there.

The $100 million Lloyd’s of London policy is the custodian’s, relayed by Arch: an aggregate at a firm holding many clients’ assets, not a per-borrower entitlement, and the release names neither the insured event nor the insured party. This site has written before about what that word does without a named underwriter; the four questions there apply here unchanged.

The release calls the offering a regulated, custodial structure and claims first-mover status. That is Arch’s language, not a finding. What is checkable is narrower: Arch’s footer, read on 3 September, identifies ChainFi, Inc. under NMLS number 2637200 — a registry identifier, not a statement of what the firm is authorised to do — says plainly that ChainFi is not a bank, and excludes individual borrowers in eleven states.

Verdict

The score grades how well the product explains its risks, not whether borrowing against a gold token is sensible. Collateral here can be sold at a threshold nobody negotiates, a custodian can fail whatever its charter says, and nothing here is financial advice.