Onchain Assets Preferred for Crypto-Backed Loans, Says Sygnum CIO
- Sygnum’s CIO, Fabian Dori, states that banks favor crypto collateral in the form of onchain assets over ETFs.
- Onchain assets allow lenders to execute margin calls on crypto-backed loans in real-time, enhancing liquidity.
- Higher loan-to-value (LTV) ratios can be offered to borrowers with direct token holdings compared to ETFs.
- Crypto lending is recovering after a decline during the bear market of the previous year.
- JP Morgan is exploring plans to offer crypto-backed loans by as early as 2026.
The preference for onchain assets reflects a growing acceptance of crypto-backed lending among financial institutions, which are increasingly recognizing its potential benefits. The rise in crypto lending activity indicates a shift towards more secure and efficient loan structures.
As noted, higher LTV ratios enable borrowers to access more credit against their posted collateral, signaling an evolving landscape for cryptocurrency loans.(Source)
