Arch Lending Proposes New Standards for Bitcoin-Backed Debt

Sahay’s recent circuit—spanning London, Columbus, and New York—focused on educating borrowers about the risks inherent in digital asset credit. At the Bitcoin Corporate Day in London, he outlined four critical inquiries for any firm evaluating a term sheet: who maintains custody of the keys, whether collateral is subject to rehypothecation, the specific mechanics of liquidation, and the legal status of the assets should the lender encounter insolvency.

For long-term holders, the appeal of borrowing is simple: it provides necessary cash for business operations or real estate without forcing the permanent liquidation of a position. However, Sahay emphasizes that the market remains in its infancy compared to traditional real estate or government-backed credit. By advocating for segregated custody and prohibiting the reuse of pledged assets, Arch Lending aims to professionalize a sector that is still recovering from the structural failures observed in 2022. As the firm continues to expand its offerings—which now include Ethereum, Solana, and gold-backed tokens—the focus remains on shifting the industry toward institutional-grade transparency.