šØ Lynq settlement network reaches 30 institutional members and $89M in assets using tokenized money market funds instead of stablecoins for 24/7 payments šØ
Institutional settlement network Lynq announced it has grown to 30 members and $89 million in assets on platform after launching in July 2025, differentiating itself by using tokenized money market funds (MMFs) as the payment instrument rather than traditional stablecoins. Founded by Arca (issuer of the TFND tokenized MMF on Avalanche), tZero (providing broker-dealer license and custodial functions), and Tassat (payment network developer), Lynq filled a critical gap after digital asset firms lost two 24/7 payment networksāSignet and SENāduring the 2023 banking crisis. The network addresses the stablecoin yield debate by using interest-bearing tokenized MMFs for settlement, ensuring institutions never stop earning returns on their cash while accessing round-the-clock payments, though transfers require whitelisting unlike open stablecoin systems.
š Key points
š¹ 30 members, $89M in assets: Lynq has grown to 30 institutional members and $89 million in platform assets since launching in July 2025; the network leverages Tassat technology, which previously powered Signet before the 2023 banking crisis, allowing several hundred digital asset firms already set up for Tassat to onboard quickly.
š¹ Tokenized MMF payment instrument: Lynq uses Arca's TFND tokenized money market fund on Avalanche as the settlement medium instead of traditional stablecoins; this approach addresses the stablecoin yield debate by ensuring institutions continuously earn interest on settlement balances rather than holding zero-yield dollar tokens.
š¹ Tri-party infrastructure: The network is jointly operated by Arca (tokenized MMF issuer), tZero (broker-dealer license and custody provider), and Tassat (payment network technology developer); this structure combines asset management, regulatory compliance, and payment rails in a single coordinated ecosystem.
š¹ Banking crisis gap-filler: Lynq launched to replace Signet and SEN, two 24/7 institutional payment networks that collapsed simultaneously during the 2023 banking crisis; digital asset firms lost critical settlement infrastructure when Signature Bank and Silvergate Bank failed, creating demand for an alternative that doesn't rely on traditional bank deposit rails.
š¹ MMF vs. stablecoin trade-offs: Tokenized MMFs differ from stablecoins in three key areasāregulatory treatment (securities vs. payment tokens), interest generation (MMFs earn yield, stablecoins typically don't), and accessibility (MMFs require whitelisting, stablecoins allow permissionless transfers); while whitelisting disadvantages retail payments, it's less critical for institutional settlement networks where KYC/AML controls are mandatory.
š Why it matters
š¹ Yield-bearing settlement alternative: By using tokenized MMFs instead of stablecoins, Lynq solves the capital efficiency problem that has plagued institutional stablecoin adoptionātreasury departments refuse to hold zero-yield cash equivalents when overnight rates exceed 4%; MMF-based settlement allows 24/7 payments while continuously earning money market returns.
š¹ Regulated asset advantage: Tokenized MMFs are registered securities with clear regulatory oversight, redemption guarantees, and investor protections that stablecoins lack; this regulatory clarity appeals to institutional treasurers and compliance departments who cannot justify holding unregulated stablecoins on balance sheets.
š¹ Banking crisis resilience: Lynq's growth demonstrates that institutional demand for 24/7 settlement persists despite the collapse of Signature and Silvergate; by building on blockchain rails rather than fractional reserve bank deposits, the network offers resilience against bank runs and FDIC takeovers that destroyed Signet and SEN.
š¹ Stablecoin yield debate resolution: Lynq's model sidesteps the contentious debate over whether stablecoin issuers should pass through yield to holders; by using tokenized MMFs as the settlement instrument, institutions receive yield automatically through net asset value appreciation rather than relying on issuer discretion or revenue-sharing agreements.
šÆ Bottom line: Lynq's growth to 30 members and $89 million in assets proves institutional demand for yield-bearing settlement alternatives to traditional stablecoins, particularly after the 2023 banking crisis eliminated Signet and SEN. By using Arca's tokenized MMF on Avalanche as the payment instrument, Lynq delivers 24/7 settlement with continuous interest accrual, solving the capital efficiency problem that prevents treasurers from holding zero-yield stablecoins. While whitelisting requirements limit retail accessibility, this is irrelevant for institutional networks where KYC/AML controls are mandatory. If tokenized MMFs scale as settlement media, they could fragment the stablecoin market by capturing the institutional segment that prioritizes yield and regulatory clarity over permissionless accessibilityāleaving traditional stablecoins to dominate retail payments and DeFi while ceding the treasury management use case to registered securities.
https://www.ledgerinsights.com/lynq-the-network-that-uses-tokenized-mmfs-for-settlement-has-30-members/