The Swiss firm will conduct all interactions with the Liquity smart contract on its clients’ behalf, but only a select few with over $500,000 on the platform will have access to the product.
Bitcoin Suisse has begun offering decentralized finance (DeFi) services to its clients with the addition of the Liquity protocol to its product lineup. It allows customers to post Ether (ETH) collateral in the protocol to mint and borrow the Liquity Dollar (LUSD) stablecoin.
In an announcement on April 20, Bitcoin Suisse said it will perform all smart contract interactions and system monitoring on its client’s behalf and allow the borrowed LUSD token to be exchanged into any fiat currency.
Bitcoin Suisse is a centralized crypto and financial services company founded in 2013 and based in Switzerland, offering services such as trading, custody, lending and staking of cryptocurrencies to mostly institutional investors.
Liquity is a DeFi borrowing protocol launched in April 2021 which allows users to post ETH collateral into its smart contract and borrow its native LUSD stablecoin at a 0% interest rate. Liquity currently has over $1.1 billion in total value locked into its contract.
CEO of Bitcoin Suisse Dirk Klee said the firm was proud to take a “significant step” toward offering decentralized solutions to its clients:
“DeFi offers significant improvements over traditional financial services by being more open, more transparent, and more competitive.”
Launched as a pilot stage, Bitcoin Suisse says it’s only available to a select and “very small number” of its clients with the borrowing amount set above $500,000.
CeFi is making DeFi its new rails. This is just the tip of the iceberg. Keep an eye on this, people! https://t.co/YfB3Zg21Qk
— Ash (@ashleighschap) April 20, 2022
DeFi is becoming a particular interest to both the crypto sector and traditional finance, with the current total value locked (TVL) across the ecosystem nearing $215 billion, according to DefiLlama. This is not far from its $254.8 billion all-time high on December 2, 2021.
Related: The many layers of crypto staking in the DeFi ecosystem
Centralized platforms are increasingly using DeFi infrastructure by either offering a central way to access decentralized services or by backing their products with DeFi smart contracts or liquidity.
In March, Binance added functionality for use of the decentralized exchange (DEX) PancakeSwap from within the Binance app, integrating the DEX onto its centralized platform. In the same month, it also launched an updated blockchain bridge, allowing assets to be bridged from any blockchain.
Australian-based finance app Blockearner backs its “Yield Account” product promising a 7% annual percentage yield (APY) with DeFi lending protocols Aave and Compound Finance, with users only having to deposit Australian Dollars which the app then stakes in DeFi on their behalf.
Bitcoin Suisse has long integrated crypto technology into its offerings. In November 2021, it was the first cryptocurrency payment processor in Switzerland to integrate the Bitcoin (BTC) Lightning Network in its effort to “promote the broader adoption of crypto technology.”
