Galoy, a provider of Bitcoin-native banking infrastructure, has introduced Lana, a lending platform designed to facilitate digital asset-backed lending for banks of all sizes.
Lana specifically caters to the growing demand for bitcoin-backed loans, particularly among challenger and community banks. As stated in the announcement, the platform aims to widen access to digital asset-backed lending through a secure, efficient, and regulatory compliant solution.
Lana enables smaller banks to offer fiat loans secured by bitcoin collateral, providing customers with a means to access liquidity without selling their bitcoin holdings. Bitcoin-backed lending is considered a lower-risk option for banks due to bitcoin’s high liquidity.
Lana simplifies the operational processes involved in offering digital asset-backed lending, including loan creation, approval workflows, fee and interest calculation, and managing margin calls and liquidation. By utilizing Lana, banks can reduce the time to market for bitcoin-backed loans from months or years to just weeks.
This enables them to diversify their lending portfolios while achieving better interest rate margins than conventional mortgage or consumer loans. As mentioned in the announcement, the platform allows banks to offer their customers the option to borrow against their bitcoin holdings rather than selling them.
This approach enables borrowers to avoid capital gains taxes and maintain exposure to bitcoin’s long-term growth potential. As noted in the update, Lana integrates with core banking systems, cryptocurrency custodians, and exchanges, ensuring compatibility with the existing banking ecosystem.
The platform automates key processes like collateral management and liquidation, simplifying operations. Galoy designed Lana to meet regulatory standards, providing a fully auditable and scalable solution for bitcoin-backed lending.
As the adoption of digital assets accelerates, Lana explained in the update that it positions financial institutions to navigate the evolving landscape of lending.
According to Nicolas Burtey, Founder at Galoy,
“Lana equips banks with the tools to offer bitcoin-backed loans confidently and efficiently, creating new opportunities for growth while meeting evolving client needs.”
Lana represents a notable development in the realm of digital asset-backed lending.
By streamlining the operational processes involved in offering bitcoin-backed loans, Lana enables banks to diversify their lending portfolios and cater to the growing demand for innovative financial solutions.
However, it is important to be aware of the limitations associated with implementing this tech, such as ensuring regulatory compliance and managing the risks inherent in digital asset-backed lending (which can actually be somewhat similar to the traditional lending risks).
As the adoption of digital assets becomes more widespread, it will be vital to monitor the ongoing development and overall impact of platforms like Lana.