(1) An archaic term for pledging that did not involve either possession or title transfer.
(2) Any pledge of an asset as collateral for a debt. (An uncommon but correct usage.)
(3) The pledge of marketable securities or deposits to secure a loan - particularly the pledge of marketable securities or deposits owned by someone other than the borrower. American Banker Glossary
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In banking, refers to the commitment of property to secure a loan. Bloomberg Financial Dictionary
In securities, refers to the commitment of securities to serve as collateral for margin loans at the broker-dealer firm. Bloomberg Financial Dictionary
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1) The pledging of assets to secure a loan.
2) The dedication of the proceeds of a specific tax to a specific purpose.
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hypothecation UK US /haɪˌpɒθəˈkeɪʃən/ noun [U]
► TAX a situation in which money from a particular tax is only spent on one particular thing: »
Traditionally the UK Treasury has rejected the idea of hypothecation.
► FINANCE a situation in which an organization borrows money in relation to particular assets that become the property of the lender if the borrower cannot pay back the loan: »
Income Notes are secured by way of hypothecation of the assets covered by each Income Note.
Financial and business terms. 2012.