Bitcoin Smart Accounts

Use custodied Bitcoin in DeFi without moving it out of custody. Bitcoin Smart Accounts (BSA) are the first rail between institutional custody and onchain finance — built for institutions that need DeFi access while preserving regulated custody, legal title, and beneficial ownership.

Why Bitcoin Smart Accounts

Custody Stays Put

Bitcoin remains with your qualified custodian at all times. No transfer of title, no surrender of control.

DeFi Access

Borrow stablecoins or earn yield through integrated protocols like Morpho, all from custodied BTC.

Account Isolation

Each Smart Account is fully isolated. Positions are managed onchain with full transparency.

BSA is built for asset managers, crypto funds, corporate treasuries, and high-net-worth individuals who hold Bitcoin at qualified custodians and want DeFi exposure without triggering taxable transfers or operational risk.

How It Works

Add BSA Designation

Apply a Bitcoin Smart Account designation to an existing custody account at a participating custodian

BTC.b Issued Onchain

The system recognizes your Bitcoin and issues a BTC.b receipt token representing the held BTC

Connect to DeFi

Use BTC.b as collateral on integrated protocols to borrow stablecoins or earn yield

Manage Onchain

Track positions, rates, and reserves onchain while the underlying BTC stays in custody

The architecture uses partially signed Bitcoin transactions (PSBTs) and time locks to form emulated covenants — programmable locking on Bitcoin without changing custody arrangements. Lombard’s infrastructure provides the onchain representation and DeFi connectivity; the custodian still holds the keys.

BSA vs. Direct DeFi Deposit

CustodyStays with qualified custodian

Legal titleRetained by holder

Tax eventNone on designation

Account isolationPer account

DeFi accessThrough integrated protocols

Best for: Institutions with regulated custody requirements

CustodyMoves to protocol or wrapper

Legal titleVaries by structure

Tax eventOften triggers a transfer

Account isolationPooled

DeFi accessDirect

Best for: Individual users and unrestricted capital

Set Up a Bitcoin Smart Account

BSA is currently available through select qualified custodians. Setup is coordinated with your existing custody provider.

Steps

Confirm BSA support with your qualified custodian
Add a Bitcoin Smart Account designation to an existing custody account
The system recognizes the Bitcoin onchain and issues a corresponding BTC.b receipt token
Connect to integrated DeFi protocols to borrow or earn yield
Manage positions onchain while the underlying BTC stays in custody

Eligibility

Asset managers and crypto funds running DeFi yield strategies
Corporate treasuries seeking working capital without selling BTC
High-net-worth individuals needing liquidity without triggering tax events
Any institution holding Bitcoin at a qualified custodian that has enabled BSA

Integrations

Morpho

The first integration is with Morpho, a lending protocol with deep institutional liquidity. Through Morpho, custodied BTC can be used as collateral to:

Borrow stablecoins against Bitcoin holdings
Earn yield by supplying BTC.b into curated lending markets

Positions are fully onchain and transparent. The underlying BTC never leaves custody.

Bitwise Asset Management

A strategic partnership with Bitwise Asset Management extends BSA to institutional Bitcoin holders served by Bitwise. The integration lets institutional clients earn yield and borrow stablecoins through Morpho without moving assets from regulated custody.

Additional custodians and protocols are rolling out throughout 2026.

Security

Qualified Custody

BTC remains with regulated custodians at all times

Account Isolation

Each Smart Account is fully isolated from others

PSBT + Time Locks

Emulated covenants enforce DeFi positions onchain

Security Consortium

15 institutional members validate critical operations

Onchain Transparency

Positions and reserves visible and verifiable onchain

Legal title and beneficial ownership do not change at any point. There is no transfer of title and no surrender of control to a third party.

Get Started

BSA is rolling out through Lombard’s institutional partners. To enable a Bitcoin Smart Account or discuss integration options:

Email: institutional@lombard.finance
Lombard App: lombard.finance/app

For developer documentation on integrating BSA into custody platforms, see the BSA Integration Guide, Bitcoin Connect, and the Lombard SDK.