Michael Saylor Says Banks Will Lend Against Bitcoin Without Congress. Deutsche Bank Is Already Waiting for Approval.

Michael Saylor, the Chairman of MicroStrategy, believes that Bitcoin lending will become a mainstream practice in banking, regardless of any new legislation from Congress. Deutsche Bank, a major financial institution, is already in the process of obtaining approval for Bitcoin-backed lending, awaiting final clearance from Germany's financial regulator, BaFin.

This process, which is separate from any Congressional action, hinges on regulatory guidelines set by the Basel Committee and the Federal Reserve, as well as the OCC's interpretation of U.S. laws.

While Saylor argues that Bitcoin's legal status as a regulated commodity with the CFTC and SEC, along with the OCC's recent decisions, will allow banks to lend against it, he acknowledges that these steps are not definitive and could be overturned by future administrations or judicial rulings. Nonetheless, the CLARITY Act, if passed by Congress, would codify Bitcoin's status as a commodity, removing regulatory uncertainty and paving the way for banks to lend against it with confidence.

Deutsche Bank's planned custody service for Bitcoin and Ethereum, set to launch by the end of 2026, is a significant step towards this potential future. However, the service only covers custody, not lending, and must still secure approval from BaFin under the EU's Markets in Crypto-Assets regulation. Once Deutsche Bank's custody service becomes operational, banks would need to hold Bitcoin collateral to provide loans, with the intention of lending a portion of the asset's value to mitigate risk from price volatility.

This model could draw Bitcoin into the traditional banking system, potentially impacting its price dynamics and overall integration into mainstream finance.