Flow Traders Tests Lombard's Bitcoin-Backed Stablecoin Credit

Lombard Finance has launched its Bitcoin Onchain Credit Strategy with Flow Traders as an early institutional participant. This new credit strategy allows Flow Traders to borrow stablecoins while using Cap's platform for collateral coverage through Bitcoin Earn deposits.

The product separates the borrower from the collateral provider, allowing regulated, institutional trading firms to tap into on-chain credit for the first time. According to Lombard CEO Jacob Phillips, this structure has made it possible for such firms to access stablecoin financing without posting their own collateral directly on-chain.

Chainlink's Cross-Chain Interoperability Protocol (CCIP) was used to move BTC.b from Avalanche into the Ethereum vault used by the strategy. This allows the credit product to draw Bitcoin liquidity from Avalanche while Cap manages borrowing on Ethereum.