Lombard announced that it will launch Bitcoin Smart Accounts. The accounts are designed to enable Bitcoins in institution custody to serve as onchain collaterals without having to move the asset, or transfer control to a 3rd party.
A Cointelegraph announcement states that after the launch of this quarter custodied Bitcoins will be recognized by a BTC.b token. Institutions can then access liquidity and lending venues, while still maintaining their legal ownership.
Lombard stated that the framework is aimed at asset managers, corporate treasurers and other institutions whose Bitcoin (BTC) remains idle in qualified custody. Lombard is currently conducting pilots with selected institutional clients. However, the names of these customers or their transaction volumes have not been disclosed.
Bitcoin is not a native yield network, which has caused it to be unused in comparison with proof-of stake networks. This dynamic is changing as more protocols are attempting to use Bitcoins that have been entrusted to them to be put to work.
Unsticking Bitcoin
Jacob Phillips, co-founder of Lombard and Cointelegraph contributor, said that the decentralized exchanges account for an important share of cryptocurrency trading. About half of all lending and borrowing takes place already onchain. Phillips stated:
Bitcoins have been stuck. There’s about $1.4 trillion worth of BTC that is sitting idle. Only around $40 billion are actively involved in DeFi. If you want to get your Bitcoins to work, until now you have had to either wrap them or transfer them to centralized services. That meant giving up custody security that institutions require. We’re trying to solve that problem.
Morpho is the first liquidity partner. Additional onchain protocols, and custodians integrations are expected in time.
Phillips said Morpho was selected for its institutional-focused lending infrastructure and experience supporting isolated Bitcoin-backed lending, adding that Bitcoin Smart Accounts are designed as open infrastructure rather than a closed integration, allowing Lombard to support additional DeFi protocols as demand emerges.
Lombard, founded in 2024 and focusing on Bitcoin, develops tokenized assets including LBTC, BTC.b and LBTC.b. These are designed to allow Bitcoin to be used without ever leaving the custody of Lombard, says the company.
Related: Bitwise to launch onchain vaults via Morpho
Bitcoin for idle products
Coinbase, a US-based cryptocurrency exchange, launched its new platform on May 1. Coinbase Bitcoin Yield FundTargeting non-US institutions investors, with an annual net expected return Bitcoin holders can expect to receive a return of between 4% and 8%.
Then, a few months after that Solv Protocol launched a structured yield vault For institutional investors. Designed to distribute idle Bitcoins across various yield strategies, including decentralized finance, centralised finance, and traditional markets. Solv’s BTC+ vault offers strategies including protocol staking. basis arbitrage. and exposure to real-world tokenized assets.
On Feb. 4, institutional crypto infrastructure provider Fireblocks said it would integrate Stacks To give institutional customers access to Bitcoin-based loan and yield.
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Source: cointelegraph.com
