Lombard plans to launch Bitcoin Smart Accounts this quarter, allowing institutions to use custodied Bitcoin as onchain collateral without moving the asset or transferring control.
Under the framework, Bitcoin held in qualified custody will be recognised onchain through a receipt token called BTC.b, enabling access to lending and liquidity venues while retaining legal ownership and existing custody arrangements.
“You’ve got roughly $1.4 trillion in BTC sitting idle, with only about $40 billion active in DeFi,”
Said Lombard co-founder, Jacob Phillips.
“Until now, if you wanted to put your Bitcoin to work onchain, you had to wrap it or move it into centralised services, which meant giving up the custody security institutional holders require, and that's the problem we're solving,”
Phillips added.
Morpho will act as the initial liquidity partner, with Lombard designing the product as open infrastructure to support additional DeFi protocols and custodians over time, and following the announcement the Bitcoin price was unchanged at $67,793.
The product targets asset managers and corporate treasuries whose Bitcoin remains idle in custody, as decentralised exchanges and onchain lending account for an increasing share of crypto trading activity.
Founded in 2024, Lombard develops Bitcoin-focused onchain infrastructure including LBTC and BTC.b, joining a broader institutional push by firms such as Coinbase, Solv Protocol and Fireblocks to generate yield from dormant Bitcoin holdings.
At the time of reporting, Bitcoin price was $67,779.75.