Lombard Systems Raises $4 Million to Build Financing Infrastructure for Tokenized Securities

November 6, 2026 • FinTech News
Lombard Systems Raises $4 Million to Build Financing Infrastructure for Tokenized Securities

Lombard Systems has raised $4 million to advance its Delivery-versus-Lock standard, which aims to let institutions borrow against tokenized securities without transferring collateral from existing custody accounts.

Tokenized securities are gaining ground in traditional financial markets. However, one important challenge remains: allowing investors and institutions to borrow against these assets without disrupting existing custody arrangements.

Dubai- and New York-based Lombard Systems is seeking to address that gap. The company has raised $4 million across pre-seed and seed funding rounds, led by Ethereal Ventures, with participation from Alps Capital, First Commit Capital, Veris Ventures, Atka and other investors.

Formerly known as SemiLiquid/PCP, Lombard Systems created and maintains the Delivery-versus-Lock (DvL) standard. The framework is designed to support collateralized financing against tokenized and digital assets while allowing those assets to remain in their existing securities accounts.

The company plans to use the funding to accelerate institutional adoption, expand integrations with financial institutions and complete legal opinions across several jurisdictions. It also expects its first institutional deployment to go live by the end of 2026. <Cite refs={[“turn721472search6″,”turn721472search8”]}/>

Why Tokenized Securities Need Better Financing Infrastructure

Tokenization allows financial assets to be represented on distributed ledger technology. This can support faster settlement, improved transferability and greater flexibility in how institutions manage assets.

However, tokenization alone does not solve every problem in financial markets.

Traditional collateralized lending often requires a borrower to transfer securities to a lender or a third-party collateral agent. The parties must also agree on documentation, custody arrangements and procedures for enforcing their rights if the borrower defaults.

These processes can become complicated when assets exist in tokenized form but remain connected to traditional securities accounts and regulated intermediaries.

Consequently, institutions need more than the ability to issue or transfer tokenized securities. They also need reliable ways to pledge those assets, establish enforceable security interests and manage defaults.

This challenge is becoming more relevant as established market infrastructure moves towards tokenization.

On October 28, 2026, the Depository Trust Company (DTC), a subsidiary of the Depository Trust & Clearing Corporation (DTCC), launched its Tokenization Service. The service supports tokenized representations of eligible securities held at DTC, connecting digital asset infrastructure with established securities market arrangements.

Meanwhile, the US Securities and Exchange Commission issued temporary, conditional relief in September 2026 to facilitate trading in certain tokenized US stocks through qualifying venues.

These developments indicate growing institutional engagement with tokenized securities. However, trading and settlement infrastructure still needs complementary financing and collateral-management solutions. <Cite refs={[“turn721472search0″,”turn721472search3”]}/>

How Lombard Systems’ Delivery-versus-Lock Standard Works

Lombard Systems developed DvL to address the movement and enforcement challenges associated with traditional collateralized lending.

Under the proposed framework, tokenized or digital assets remain locked in the borrower’s name within an existing securities account at a custodian, broker-dealer or transfer agent.

Instead of transferring the assets to the lender, the arrangement gives the lender a security interest in the collateral. A cryptographically signed document known as a Credit Receipt provides evidence of that interest.

The borrower retains beneficial ownership while the financing arrangement remains in place. If a validated default occurs, the lender can receive the amount owed under pre-agreed enforcement terms.

The framework is designed to connect three important elements:

  • Asset control: The collateral remains in the borrower’s existing securities account rather than moving to a separate lender-controlled account.
  • Lender protection: The lender receives a security interest supported by the Credit Receipt and the agreed legal arrangements.
  • Defined enforcement: The parties establish the conditions for default and collateral delivery in advance.

This structure aims to reduce the operational friction associated with moving securities while providing lenders with a defined route to enforce their rights.

However, the legal effectiveness of any security interest depends on the relevant jurisdiction, documentation, custody arrangements and applicable law. DvL’s intended legal protections should therefore be distinguished from a universal guarantee of enforceability across every market.

$4 Million Funding to Support Legal and Institutional Adoption

The new capital will help Lombard Systems develop the legal and operational foundations required for wider institutional use.

A major part of the programme involves completing legal opinions in the United States, England and Wales, alongside five additional jurisdictions.

This work is important because collateral arrangements must operate within established legal systems. Institutions need clarity on how security interests are created, recognised and enforced before they can incorporate a new framework into lending operations.

Lombard Systems also plans to expand adoption among additional Control Locations, strengthen integrations with banks, broker-dealers and transfer agents, and grow its team.

The company is targeting its first institutional deployment by the end of 2026. Further integrations are expected in the coming months.

The full DvL standard is expected to be published in the first quarter of 2027 through the project’s dedicated website, DvLStandard.org. <Cite refs={[“turn721472search6″,”turn721472search11”]}/>

Which Financial Activities Can Use DvL?

Lombard Systems says its standard is designed to support several institutional financing activities.

These include:

  • Lombard and margin loans: Borrowing against eligible securities and other assets.
  • Tokenized money market funds: Using tokenized fund holdings as collateral for financing.
  • Financing against tokenized stocks: Supporting loans secured by tokenized equity positions.
  • Securities lending by pledge: Enabling securities lending arrangements without relying on conventional collateral transfers.
  • Initial margin for uncleared derivatives: Supporting collateral arrangements under existing ISDA Master Agreements.

The framework can also be deployed on a white-label basis within an institution’s existing systems. Financial institutions may adopt it directly or through technology partners.

This flexibility could be important for banks and brokers that want to introduce digital asset financing without replacing their existing technology infrastructure.

Nevertheless, actual deployment will depend on institutional integrations, asset eligibility, custody support and the legal requirements of each market.

Why Institutional Investors Are Watching Tokenized Collateral

The investment reflects growing interest in the infrastructure needed to connect traditional financial services with tokenized assets.

Ethereal Ventures led the funding round. Its Co-CIO, Eeshaan Sachatheva, said tokenization is creating opportunities in trading and settlement, with further potential in financing.

That distinction is important. Tokenization can improve how assets are represented and transferred, but its broader financial value also depends on whether institutions can use those assets in familiar activities such as lending, securities financing and derivatives transactions.

For lenders, the ability to accept tokenized collateral without requiring a separate transfer could offer operational advantages. For borrowers, retaining assets within existing securities accounts may simplify collateral management.

However, institutional adoption will depend on more than technical functionality. Banks, custodians and brokers will need confidence in legal enforceability, operational controls, default procedures and the responsibilities of participating intermediaries.

DvL is entering a market where those requirements will shape whether tokenized collateral becomes a practical financing tool.

TheFinRate Take: Tokenization’s Next Test Is Credit and Collateral

The tokenization market is moving beyond asset issuance and settlement. Financial institutions are increasingly exploring how digital representations of securities can support established financial activities.

Lombard Systems is targeting one of the most important parts of that transition: collateralized financing.

Its Delivery-versus-Lock standard aims to let institutions borrow against tokenized assets while keeping them in existing securities accounts. If the framework gains institutional acceptance and its legal arrangements prove effective across relevant jurisdictions, it could help connect digital asset infrastructure with traditional credit markets.

But the next phase will require evidence. The first institutional deployment, legal opinions, custody integrations and publication of the full standard will be important milestones.

Tokenized securities may change how financial assets move. Their wider institutional value will also depend on whether investors can borrow against them with the legal certainty and operational safeguards that financial markets demand.

Lombard Systems Raises $4 Million to Standardize Financing for Tokenized Securities