As the first universal bank in Switzerland, LUKB now gives its clients the option to pledge Bitcoin and Ethereum as collateral for loans. «We are responding to market developments and client needs,» says Serge Kaulitz, Head of Blockchain & Digital Assets at LUKB.

With this expansion, LUKB marks an initial step in using cryptocurrencies within the lending business, laying the groundwork for further growth and the consistent integration of the entire value chain of digital assets. «Cryptocurrencies have become a recognized and highly liquid asset class. Similar to equities or funds, they can serve as collateral for a Lombard loan, since they can be liquidated at any time,» Kaulitz explains.

Positive Development

The Lucerne state bank has been active in the field of digital assets since 2016. However, the sale and custody of Bitcoin, Ethereum, and other cryptocurrencies have only been offered since spring 2024.

Demand for this type of service is certainly present. «We are pleased with the development,» says Kaulitz. According to LUKB’s 2024 annual report, around 1,000 clients held digital assets worth approximately 40 million francs in the first few months.

The digital business also serves to diversify LUKB’s portfolio amid declining interest rates. This non-interest income stream is gaining importance. At the same time, the digital business is intended to help the bank enhance its «digital services across the entire institution,» Kaulitz emphasizes.