Sygnum Bank Launches Bitcoin Multisig Lending with Debifi Partnership

Sygnum Bank has announced a groundbreaking partnership with Bitcoin-backed lending platform Debifi to introduce a multisignature lending product that revolutionizes how borrowers maintain control over their cryptocurrency collateral.

Distributed Key Management for Bitcoin Loans

The Swiss digital asset bank revealed on Friday that this innovative product implements a Bitcoin-native multisign lending model, enabling clients to retain control of their collateral through distributed key management. This approach ensures that assets cannot be rehypothecated, addressing a major concern among cryptocurrency investors.

Under this new system, Sygnum clients can secure fiat loans backed by Bitcoin using a security model that requires three of five key holders to authorize any transaction. This structure allows borrowers to track and verify their collateral directly on the blockchain, providing unprecedented transparency in the lending process.

A Departure from Traditional Custody Models

Sygnum Bank emphasized that while competing financial institutions require full custody for Bitcoin-backed loans, their MultiSYG product's distributed key management system allows clients to maintain verifiable control of their collateral throughout the entire loan term. This feature responds to growing demand from Bitcoin investors who want to leverage their holdings without surrendering complete custody.

The bank plans to launch the product in the first half of 2026, with availability extended to all Sygnum Bank customers at that time.

Bitcoin-Backed Lending Sees Market Revival

The cryptocurrency lending sector has experienced renewed interest in Bitcoin-backed loans throughout the current year. This resurgence follows previous market disruptions and demonstrates institutional confidence in structured cryptocurrency lending.

In April, Bitcoin mining company Riot Platforms leveraged its cryptocurrency stockpile as collateral to obtain a $100 million credit facility from Coinbase Prime, the credit division of Coinbase. This marked a significant milestone in the return of institutional Bitcoin-backed lending.

Coinbase Prime continued its lending activities by issuing another $100 million loan to mining company Cleanspark in September. The same month, Cleanspark secured an additional $100 million line of credit backed by its Bitcoin treasury from Two Prime, demonstrating the scalability of Bitcoin collateralization.

According to Bloomberg reporting, Cantor Fitzgerald entered the Bitcoin-backed lending market in May, issuing loans to FalconX and Maple Finance. FalconX confirmed securing a facility exceeding $100 million as part of a broader credit arrangement, while Maple Finance completed the initial tranche of its agreement with Cantor.

The Future of Bitcoin Collateralization

The emergence of multisignature lending models represents a significant evolution in cryptocurrency financial services. By combining the regulatory framework of traditional banking with blockchain-native security features, products like Sygnum's MultiSYG address fundamental concerns about custody and control that have historically limited institutional adoption of Bitcoin-backed lending.

This distributed key management approach could set a new standard for the industry, potentially encouraging more conservative cryptocurrency holders to explore lending opportunities without sacrificing the self-custody principles that many value. As the product launches in 2026, market observers will closely monitor whether this model gains traction among institutional and retail clients seeking to maximize the utility of their Bitcoin holdings while maintaining security and control.

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