Sygnum and Debifi Launch Multisig Bitcoin Loans

A Big Step for Bitcoin-Backed Bank Loans

Holding Bitcoin often leaves investors with a tough choice: sell their assets to access cash, or keep them locked away for long-term growth. Now, a new financial product offers a way to borrow against crypto without giving up full ownership.

Swiss-headquartered digital asset bank Sygnum and Latvian lending platform Debifi have launched Multi SYG. This new loan product allows users to take out cash loans backed by Bitcoin (BTCBTC+0.18%), using multi-signature (multisig) security to keep funds safe.

While multisig loans already exist in the crypto market, this product appears to be the first of its kind offered directly by a fully regulated bank.

What Is Multi SYG and How Does It Work?

Multi SYG is designed to prevent a single company or person from taking off with your assets. Instead of giving your Bitcoin to a single custodian, your collateral goes into a dedicated multisig wallet created just for you.

Think of a multisig wallet like a secure vault that needs multiple distinct keys to unlock. Multi SYG uses a 3-of-5 multisig structure, meaning at least three out of five total keys are required to move any funds.

• Borrower Key: You hold 1 key.
• Bank Key: Sygnum holds 1 key.
• Institutional Keys: Three independent institutional keyholders hold the remaining 3 keys.

Because no single party holds three keys on their own, nobody can move your Bitcoin without broader agreement. These signing rules are enforced directly on-chain through Bitcoin script. The Bitcoin network itself automatically rejects any transaction that lacks the required valid signatures.

Loan Ratios, Transparency, and Liquidation Risks

Multi SYG sets a maximum loan-to-value (LTV) ratio of 65%. This means if you deposit $10,000 worth of Bitcoin as collateral, you can borrow up to $6,500.

Borrowers can verify on-chain at any time that their collateral remains safely stored in its assigned wallet. If you ever lose access to your key, the independent institutional keyholders can step in to help restore access.

However, borrowing against digital assets involves risk. Crypto market prices can be volatile. If Bitcoin prices drop sharply, borrowers may face a margin call requiring them to deposit more collateral or pay down part of the loan.

If collateral must be liquidated following a margin call, the bank and other authorized keyholders must sign the liquidation transaction together to process it.

Legal Protections Under Swiss Banking Law

Working with a regulated Swiss bank gives borrowers additional legal protection compared to unregulated platforms.

Under Swiss banking regulations, client assets are held off-balance-sheet and are bankruptcy-remote. This rule means your collateral stays strictly separate from Sygnum's operational assets, protecting your Bitcoin if the bank ever runs into financial trouble.

Why Multisig Matters: Fixing Single-Key Risks

The crypto industry has seen many incidents where relying on a single private key led to lost funds. Recent vulnerability highlights involving Coldcard and Ledger hardware wallet setups showed why relying on a single secret can pose risks.

"A year ago I said borrowers shouldn't need to trust a custodian blindly. This past year showed why, with one secret often being enough to empty a wallet."

That observation came from Max Kei, founder and CEO of Debifi. By distributing keys across five distinct entities, Multi SYG removes the need for blind trust in any single custodian.

Comparing Multi SYG to Other Crypto Lenders

Multi SYG is not the only product using multisig security for loans, but its structure is unique in the banking sector.

• Unchained and BTCBacked: Use a 2-of-3 multisig quorum for loan security.
• Firefish: Uses a 3-of-3 setup where two keys are controlled by automated programs called oracles, and the borrower holds the third key.
• Multi SYG: Uses a 3-of-5 setup combining a regulated Swiss bank with independent institutional keyholders.

Current Launch Status and Market Outlook

Sygnum and Debifi first announced their plans a year ago, aiming for a release in the first half of 2026. Sygnum currently lists Multi SYG on its website, though active onboarding is still rolling out.

At the time of writing, Bitcoin (BTC) traded around $81,627 (-0.08%), while EthereumETH+0.10% (ETH) stood at $2,400 (+0.06%).

Past performance of digital assets is not an indication of future performance. You can view current market prices and historical data on bitkub.com/th/market/BTC.