XPlace CEO Artem Ponomarev has called for safer crypto-backed borrowing tools as DeFi lending protocols hold more than $42 billion in total value locked.

Artem Ponomarev, founder and CEO of digital-wealth platform XPlace, told crypto.news that digital-asset services must move beyond helping people acquire wealth and give them responsible ways to use it.

“I think we’re moving into a stage where the question is no longer simply whether people will own digital assets, but what they can actually do with the wealth they’ve built,” Ponomarev said.

His comments focus on collateralized borrowing, which allows an investor to pledge Bitcoin, another crypto asset, or a tokenized security in exchange for liquidity. Unlike a direct sale, the arrangement lets the borrower keep exposure to the pledged asset unless its value falls far enough to trigger liquidation.

Digital wealth needs tools already common in finance

Ponomarev compared the model with borrowing against property or securities, a common service in traditional wealth management. Investors use securities-backed credit when they need cash but do not want to sell positions held for long-term returns.

“In traditional finance, borrowing against assets is completely normal,” he said. “Investors borrow against securities or property because they don’t necessarily want to sell a long-term position every time they need liquidity.”

The US Financial Industry Regulatory Authority describes a securities-backed line of credit as a loan that uses assets held in an investment account as collateral. According to FINRA’s investor guidance, the lender may demand additional collateral or sell pledged securities when their value falls below the required level.

Ponomarev expects digital-asset holders to seek similar flexibility as more personal wealth moves into Bitcoin, other crypto assets, and tokenized equities. Instead of maintaining separate systems for crypto holdings, stocks, and routine spending, he said investors should be able to manage the assets as parts of one financial position.

“If someone holds Bitcoin alongside tokenized equities, those assets should be able to form part of the same financial picture and provide access to liquidity without requiring the user to sell each time they want to spend.”

Market data indicate that crypto-backed credit already has considerable activity. DefiLlama’s lending dashboard showed about $42.06 billion locked across 571 tracked protocols, with Aave holding approximately $14.74 billion. Active loans on Aave stood at about $11.26 billion.

New assets are also entering on-chain credit markets. In August, XRP entered Ethereum lending through Flare’s FXRP and a Morpho vault curated by Sentora, allowing holders to borrow Ripple USD without selling their XRP exposure.

Tokenized equities could expand available collateral

Tokenized stocks add another potential source of collateral by placing representations of equities on blockchain networks. RWA.xyz recorded $2.34 billion in distributed tokenized stock value as of Aug. 18, while its total distributed real-world asset value stood at $38.21 billion.

Products within the category do not always give buyers the same legal rights. Some tokens represent direct or beneficial ownership of securities, while others provide synthetic exposure that only follows an asset’s price.

US transfer agents raised that distinction in July when they sought tighter SEC rules for third-party tokens. Continental Stock Transfer & Trust and the Securities Transfer Association argued that products created without an issuer’s involvement could leave holders without voting rights, ownership claims, or standard investor protections.

Ponomarev’s proposal would require lending systems to determine which assets can serve as collateral and how their ownership, custody, and market value should be verified. A token that only tracks a stock may carry different legal and liquidity risks from a tokenized share connected to the issuer’s official shareholder register.

The Securities and Exchange Commission addressed the distinction in January. In its tokenized securities statement, the agency said stocks, bonds, notes, options, and other securities can be tokenized, but their digital format does not change the application of federal securities laws.

Regulated US market operators have since moved tokenized securities closer to existing trading systems. The SEC approved Nasdaq’s tokenized securities framework in March, allowing eligible securities and their tokenized forms to share the same ticker, CUSIP, shareholder rights, and order book.

NYSE has also proposed rules for tokenized securities under a Depository Trust Company pilot. Under the exchange’s filing, eligible tokens would retain the rights and privileges of the conventional securities they represent while continuing to use existing clearing and settlement arrangements.

Crypto-backed loans depend on liquidation controls

Access to liquidity introduces losses when collateral values fall, according to US regulators and international financial institutions. FINRA warns that securities-backed borrowers may face maintenance calls, forced asset sales, and variable interest expenses.

Crypto collateral adds round-the-clock price changes and automated liquidation. The Bank for International Settlements said in a report on risks in DeFi that decentralized loans tend to be overcollateralized because borrowers may be anonymous and the pledged assets can be highly volatile.

Under such systems, a protocol can sell collateral automatically when its value drops below a specified ratio. The sale repays lenders but can leave borrowers with losses, fees, and no remaining exposure to an asset they intended to hold.

Ponomarev said collateralized credit should give investors controlled access to existing wealth rather than encourage maximum leverage. For the model to work, he called for conservative loan-to-value limits, continuous collateral monitoring, and plain disclosure of interest charges and liquidation terms.

“A user should understand exactly what happens if the value of their collateral falls before they borrow,” he said.

Warnings before a position reaches its liquidation level could give borrowers time to repay part of a loan or provide more collateral. Conservative lending ratios would also leave more room between the initial loan value and the price at which pledged assets are sold.

Oracle design presents another risk because DeFi protocols rely on external pricing systems to value collateral. Stale or manipulated prices can affect a position’s recorded health, while rapid market declines can cause several loans to be liquidated together. A July guide to crypto liquidation explained that forced sales can push prices down and trigger another group of leveraged positions.

US rules leave custody and tax questions

American investors also face custody risks when pledging digital assets. SEC staff guidance states that non-security crypto assets are not protected by the Securities Investor Protection Act and may lack protection under another specific insolvency system.

According to the SEC’s crypto custody guidance, customers could lose assets if a broker-dealer becomes insolvent, depending on how the assets are held and whether they become part of the firm’s bankruptcy estate.

US capital rules present a separate limit for lenders. An August analysis by Crowell & Moring found that digital-asset collateral does not receive credit-risk mitigation recognition under current bank capital rules. The law firm also said nonbank lenders may need state licences, depending on their activities and the borrowers they serve.

Tax treatment can vary with the structure of a crypto-backed loan. The Internal Revenue Service treats digital assets as property and generally applies capital-gains rules when an owner sells or otherwise disposes of them. IRS regulations also require brokers to report covered digital-asset sales under rules taking effect in stages.

Borrowing does not itself involve an asset sale when the transaction operates as a genuine loan, but a forced disposal of collateral may create a reportable transaction. The IRS states that the fair market value of a digital asset is generally determined at the date and time of its sale or disposition.