Lombard supports institutional investors in using bitcoin they hold in custody as on-chain collateral through bitcoin smart accounts, Cointelegraph reported on Feb. 11.
The move opens a way for institutional investors to participate in on-chain finance without moving assets or handing control to a third party. Bitcoin is converted into a token called BTC.b and recognised on-chain, providing access to lending and liquidity platforms.
Lombard's system targets asset managers, crypto treasury companies and institutional investors, and supports the use of bitcoin in its existing custodial state.
It is currently running a pilot programme with some institutional clients, but customer names and transaction volumes were not disclosed.
Because bitcoin does not inherently generate yield, large amounts have been held idle. DeFi protocols have emerged in recent years, and moves to use custodial bitcoin on-chain are taking shape, Cointelegraph said.
Chi-gyu Hwang
delight@d-today.co.kr