Foundations of Fiat-Denominated Loans Collateralized by Cryptocurrencies

• URL: http://arxiv.org/abs/2510.25878v1
• Date: Wed, 29 Oct 2025 18:21:50 GMT
• Title: Foundations of Fiat-Denominated Loans Collateralized by Cryptocurrencies
• Authors: Pavel Hubáček, Jan Václavek, Michelle Yeo,
• Abstract summary: We study protocols that enable fiat-denominated loans collateralized by cryptocurrencies such as Bitcoin.<n>We provide limited-custodial protocols for such loans relying only on trusted arbitration and provide their game-theoretical analysis.
• Score: 0.10705399532413612
• License: http://arxiv.org/licenses/nonexclusive-distrib/1.0/
• Abstract: The rising importance of cryptocurrencies as financial assets pushed their applicability from an object of speculation closer to standard financial instruments such as loans. In this work, we initiate the study of secure protocols that enable fiat-denominated loans collateralized by cryptocurrencies such as Bitcoin. We provide limited-custodial protocols for such loans relying only on trusted arbitration and provide their game-theoretical analysis. We also highlight various interesting directions for future research.

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