Swiss Bank Luzerner Kantonalbank (LUKB) will now allow clients to pledge Bitcoin (BTC) and Ethereum (ETH) as collateral for loans, marking a new step in its digital asset strategy. The policy follows the bank’s addition of crypto trading and custody services in May.
According to Finews, LUKB is the first Swiss cantonal bank to extend crypto into its lending business. Serge Kaulitz, Head of Blockchain & Digital Assets at LUKB, said the decision reflects client demand and the growing recognition of cryptocurrencies as liquid assets. “Similar to equities or funds, they can serve as collateral for a Lombard loan, since they can be liquidated at any time,” he explained.
The move also diversifies LUKB’s income beyond interest-based earnings, a timely shift as interest rates decline. By building out its digital services, the bank aims to secure new revenue streams and strengthen its institutional presence in the crypto sector.
Switzerland has steadily positioned itself at the forefront of crypto banking. PostFinance introduced Ethereum staking earlier this year, while a recent Swiss Bankers Association-led pilot saw major banks, including UBS and Sygnum, complete the first blockchain-based interbank payment with full legal approval.
