Sygnum Bank Launches Multi-Signature Bitcoin Loans as BTC Collateral Surges

Sygnum, a Swiss-regulated digital asset bank, has officially launched a new Bitcoin-backed lending product that allows clients to access liquidity without ceding sole control of their assets. The product utilizes a multi-signature wallet structure, addressing growing demand from investors for more secure custody solutions.

MultiSYG Loan Details

The new offering, named MultiSYG, was developed in partnership with multi-signature lending specialist Debifi. Sygnum told Investing.com that each client's Bitcoin collateral is held in a segregated, on-chain wallet.

Control over the assets is distributed via private keys held by three parties: the client, Sygnum Bank, and an independent institutional key holder. The bank stated that any transaction requires a minimum number of signatures, preventing unilateral movement of funds, and that keys can be recovered if one is lost.

Shifting Market Dynamics

The launch comes as Bitcoin increasingly dominates the collateral pledged for the bank's traditional Lombard loans. According to Sygnum, key trends driving the new product include:

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• Bitcoin now constitutes over 80% of pledged collateral by value, a significant increase from 63% in 2023.
• The bank noted that over one-fifth of its clients currently use its Lombard loan facilities.
• Sygnum partly attributes this shift to a sharp decline in Bitcoin's one-year volatility, which has fallen from approximately 80% in 2021 to around 40% at present.

Sygnum also cited recent high-profile security incidents in the crypto industry as a key factor fueling demand for solutions that provide liquidity without forcing holders to sell their assets or transfer full custody to a single entity.

Regulatory Protection and Outlook

Client assets held as collateral are segregated from Sygnum's own balance sheet and are bankruptcy-remote under Swiss banking law, offering an additional layer of protection for investors.

"MultiSYG is a natural extension of our existing regulated lending business," said Iulian Zanoaga, Deputy Head of Credit & Lending at Sygnum. "Introducing a distributed, multi-signature security setup is the logical next step as more holders look to both secure their Bitcoin and gain liquidity."