Bitcoin-backed bank loans make their debut – "Traditional finance begins to move to the BTC network"

Swiss regulated bank Sygnum has partnered with Debifi to launch the world's first product combining Bitcoin multi-signature technology with regulated bank lending services.

This marks the debut of a “self-sovereign” Bitcoin lending solution where borrowers retain control of their private keys, as traditional financial institutions accelerate their adoption of Bitcoin as collateral.

Sygnum Bank announced this in a press release on the 24th (local time). The key feature of this new solution is that it allows borrowers to maintain “joint control” over their collateral through distributed key management, unlike conventional methods where collateral is entrusted to a single custodian.

Sygnum Bank emphasized that while customers maintain direct control over their collateral, they can simultaneously enjoy ▲competitive interest rates ▲flexible withdrawal schedules ▲various loan terms ▲professional “white-glove” service provided by a regulated bank.

Bitcoin analyst Willy Woo explained the significance, stating “The existing banking system is now moving to the Bitcoin protocol.” A protocol defines the set of rules and communication standards that determine how a blockchain network operates, how transactions are processed, and how consensus is reached. Traditional finance utilizing this demonstrates that Bitcoin is growing beyond a store of value into a network for transferring value.