As the first universal bank in Switzerland, Luzerner Kantonalbank (LUKB) now offers its clients the possibility to use Bitcoin and Ethereum as collateral for Lombard credits. With this service, clients gain liquidity without having to sell their cryptocurrencies.
In August 2023, Luzerner Kantonalbank (LUKB) announced preparations for a comprehensive crypto offering, making it the first Swiss state bank to do so. After the product launches by its peers in Zug and St. Gallen last winter, LUKB kicked off in March 2024 . Over five years, the bank built up both internal expertise and its own infrastructure integrated into the core banking system, available via e-banking and mobile banking. Now, as Switzerland’s first universal bank, LUKB is offering its clients the option to pledge Bitcoin and Ethereum as collateral, according to a press release obtained by CVJ.CH.
Lombard credit for Bitcoin and Ethereum
Cryptocurrencies have developed into a recognized and highly liquid asset class. Similar to stocks or funds, they can serve as collateral for a Lombard credit, since they can be sold at any time. Due to their volatility, LUKB deliberately applies conservative lending values to mitigate the risk of short-term price fluctuations, according to the statement. Otherwise, the pledging of cryptocurrencies works essentially the same as with traditional securities but is tailored in detail to the specific characteristics of digital assets – especially for crypto-savvy clients who prefer not to sell large holdings.
"This expands our existing range of services in crypto trading, custody, and transfers with an innovative financing solution. By accepting cryptocurrencies as collateral, LUKB is consistently strengthening its position as the leading cantonal bank in the field of digital assets." - Serge Kaulitz, Head of Blockchain & Digital Assets at LUKB
Crypto services are being expanded
At the beginning of 2024, LUKB launched its own platform for the trading and custody of Bitcoin (BTC), Ethereum (ETH), and USD Coin (USDC). In June 2024, it introduced a crypto savings plan, and by the end of the year, the offering was expanded with a fully integrated solution for the deposit and withdrawal of all cryptocurrencies as well as services for institutional clients.
Today, seven cryptocurrencies are tradable at LUKB, which – like traditional assets – are held in custody at the bank. Custody is provided within a highly secure infrastructure certified according to international ISAE-3000 and ISAE-3402 Type 2 standards, ensuring clients the highest level of security.
