Flow Traders pilots Lombard’s new bitcoin-backed credit strategy for stablecoin borrowing

Bitcoin financial products startup Lombard Finance (BARD) is launching a new product called the Bitcoin Onchain Credit Strategy with global trading firm Flow Traders (Euronext: FLOW) as a pilot partner.The offering will enable Flow to borrow stablecoins for market-making without posting its own onchain collateral. Instead, bitcoin deposited into Lombard’s Bitcoin Earn yield product will act as the collateral coverage through an underwriting setup run on Cap’s private-credit platform, according to an announcement on Thursday."Liquidity providers like Flow Traders use stablecoin financing to efficiently support their digital asset trading operations," Global Head of Digital Assets at Flow Traders Michael Lie said. "Lombard’s Bitcoin Onchain Credit Strategy connects Bitcoin holders with institutional financing activity, driven by real institutional demand and less correlated to DeFi market conditions."Bitcoin-Backed Stablecoin BorrowingBitcoin Earn is Lombard’s bitcoin yield product designed to enable users to deposit tokens like LBTC, BTC.b, WBTC, or native BTC into a single vault, currently operated by professional managers Sentora and powered by Veda infrastructure, in exchange for BTCe receipt tokens, according to its documentation.Bitcoin Earn operates as a so-called meta-vault, or fund-of-funds architecture, for bitcoin yield, where the Bitcoin Onchain Credit Strategy operates as just one allocation sitting inside it.The vault has attracted over $1 billion in deposits from more than 38,500 users total, and compounds returns BTCe, and also can earn rewards paid in BARD tokens.With the new Bitcoin Onchain Credit Strategy, Lombard depositors can now earn yield directly from the underwriting premiums Flow Traders pays, arguably offering a more stable return driven by real institutional demand over the typical DeFi setups on Aave, Morpho and others.The announcement notes Cap’s automated marketplace for private credit “uses smart contracts rather than manual intervention to allocate access to capital,” helping to ensure “each loan is independently vouched for and guaranteed and allows for unique use cases such as Lombard’s Bitcoin Onchain Credit Strategy.”The announcement notes Lombard has tapped Chainlink’s Cross-Chain Interoperability Protocol (CCIP) to secure cross-chain deposits of BTC.b directly from Avalanche into an Ethereum vault.Lombard is the provider behind Ledger’s "bitcoin yield" feature, and also provides infrastructure for Binance and Bybit. The startup acquired Avalanche’s bridged bitcoin asset and infrastructure BTC.b last October.Founded in 2024, Lombard previously raised $17 million in seed funding led by Polychain Capital, with participation from Franklin Templeton, Bybit, YZi Labs (previously Binance Labs), and others.Disclaimer: The Block is an independent media outlet that delivers news, research, and data. As of November 2023, Foresight Ventures is a majority investor of The Block. Foresight Ventures invests in other companies in the crypto space. Crypto exchange Bitget is an anchor LP for Foresight Ventures. The Block continues to operate independently to deliver objective, impactful, and timely information about the crypto industry. Here are our current financial disclosures.© 2026 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.