Bitcoin Enters Institutional Credit Markets
Bitcoin is making its first formal move into institutional credit. Lombard has partnered with Cap, an Ethereum-based stablecoin protocol, and Symbiotic, a restaking network. Together, they will transform LBTC—Lombard’s yield-bearing Bitcoin—into active insurance collateral for onchain lending.
LBTC holders can restake their Bitcoin on Symbiotic to support Cap’s institutional USD loans. This process turns Bitcoin into the guarantee behind stablecoin credit lines. Borrowers pay premiums in USDC for insurance coverage. Restakers earn yield plus their native BTC rewards.
How the Partnership Works
The partnership allows institutional borrowers, like hedge funds and trading firms, to access uncollateralized credit through Cap’s protocol. Bitcoin’s liquidity backs these loans, enforced by onchain slashing mechanisms. If a borrower defaults, the delegated LBTC is liquidated automatically to cover losses.
This setup gives Bitcoin a new role beyond passive yield or collateral. LBTC acts as programmable collateral that powers credit markets. It connects Bitcoin’s liquidity with Ethereum’s institutional DeFi infrastructure.
Bitcoin as Money and Credit Collateral
Lombard’s move challenges Michael Saylor’s famous claim that “Bitcoin is money, everything else is credit.” While Saylor sees Bitcoin as the ultimate form of money, Lombard uses Bitcoin to underwrite credit itself.
By restaking LBTC to secure institutional loans, Lombard turns Bitcoin into a yield-bearing insurance asset. This approach makes Bitcoin the foundation for credit markets, not an escape from them. It blends the concepts of money and credit, with Bitcoin serving as both collateral and guarantor of repayment.
Lombard’s model suggests Bitcoin’s future lies in mastering credit, expanding its role beyond just sound money.
