Lombard, a firm building Bitcoin-based lending infrastructure, is partnering with asset manager Bitwise to enable institutions to earn yield and borrow against their Bitcoin without moving assets out of custody. Announced at the Digital Asset Summit in New York, the initiative aims to unlock hundreds of billions of dollars in institutionally held Bitcoin capital. The platform, using Bitcoin-native tools and set to roll out in Q2 2026, seeks to address key risks that have historically limited institutional Bitcoin lending.
Lombard is teaming with Bitwise Asset Management to let institutions generate yield and borrow against Bitcoin without transferring assets from custody. The partnership, announced at the Digital Asset Summit in New York, targets the estimated $500 billion worth of Bitcoin held in institutional custody.
Jacob Phillips, CEO and co-founder of Lombard, stated the breakthrough lies in “Bitcoin Smart Accounts.” The breakthrough is Bitcoin Smart Accounts—connecting two previously isolated worlds: institutional custody and onchain finance, he said. The platform uses Bitcoin-native tools like partial signatures and timelocks to verify collateral onchain.
According to an announcement, Bitwise will develop yield strategies combining DeFi lending with tokenized real-world assets. The decentralized lending protocol Morpho will provide the underlying borrowing infrastructure for the initiative.
Phillips said the model addresses custody, bridge, and counterparty risks that have limited institutional activity. The offering targets high-net-worth individuals, asset managers, and corporate treasuries with long-held Bitcoin positions. Phillips framed this as a fundamental shift, stating, We’re moving Bitcoin from a pure store of value to productive institutional capital.
Data shows Bitcoin’s total value locked in DeFi is roughly $2.93 billion, a small fraction of its $1.4 trillion market cap. However, momentum is building for turning Bitcoin into a yield-generating asset, with onchain vaults acting as a key driver.
In recent months, Telegram added yield-generating vaults to its wallet, and Babylon Protocol integrated with Ledger. According to data, Babylon leads Bitcoin-based DeFi with about $2.8 billion in total value locked, while Lombard ranks second with around $744 million. The rollout with Bitwise and Morpho is expected in the second quarter of 2026.
