Custody Workflows

This page breaks down the core lifecycle flows for our tokenized deposits.

Workflow Participants

Tokenized collateral workflows involve two key types of parties.

Custodian Bank

A regulated financial custodian experienced in holding securities on behalf of customers (eg. BNY Mellon, State Street, Citigroup...). The custodian has final control on all issuance/redemption/transfer workflows involving tokenized collateral.

Institutional Client

An institutional client at the custodian bank. The client requests the issuance of tokenized collateral that serves as a receipt of the underlying securities held at the custodian. The client uses the benefits of tokenized collateral for composition with DLT applications and atomic settlement between counterparties that are also clients of the custodian.

Issuance Workflow

• The client submits a request to mint assets to the custodian, specifying the ISIN and quantity.

• The custodian validates the request, verifies the client’s holdings and locks/segregates the corresponding AAPL (or other asset) shares in custody.

• The custodian instructs the on-chain tokenized deposit contract to mint new tokens to the client’s wallet, mirroring the locked off-chain position.

Redemption Workflow

• The client submits a redemption request and the tokens are locked on-chain for redemption.

• The custodian validates the request and unlocks the client’s underlying AAPL (or other asset) shares in custody and approves the burn on-chain.

• The tokens are burned (archived) and the redemption is complete for the client.

Transfer Workflow

• Sender submits a transfer request to the Custodian, specifying the amount and the receiver

• Sender's tokens gets locked, and a pending transfer instruction addressed to Receiver is created.

• Receiver reviews and accepts the pending transfer instruction.

• Custodian transfers the tokens to Receiver