That’s right, but as long as the bank don’t attempt to centralize the whole collateral process. But I actually doubt if they’ll have the technology to keep everything in a decentralized system, whereby the user would still retain control of their Bitcoin but still somehow blocking them from withdrawing or spending the Bitcoin, just like the concept of staking.

I think that the fact that it goes through them is already considered as centralized.
So, the whole loaning process is within the usual process they do just as how we collateralize the other assets we have.
It's not going to be the same as the DeFi's and they will just go on with the process they used to have but this time, it's not with a tangible asset but with Bitcoin.
The mere difference might be going to the bank itself and showing yourself and that has already defeats decentralization if we're concerned about it.
Because we comply, they'll ask for ids, and other important details and at the same time they know now that we hold btc.

For me this is good sure for sure because when banks starting to accept Bitcoin as a collateral that just means that they are now trusting Bitcoin as an asset, Bitcoin adoptation already come a long way back to 2016 if I remember it right cryptocurrencies are not even recognized by the banks, usually banks and cryptocurrencies is two separate things or usually on a discussion they are rival since crpto like what other said back in the day is going to kill the banking system. But now the banks are already adopted to Bitcoin and cryptocurrency plus it has already come to the point where Bitcoin can be used as collateral.

So when it comes to value it is getting recognition, most likely it is already getting similar to something like a gold asset or like a property, real estate, maybe like a house. I don't see anything wrong with it, it was just part of the process of adoptation if we are thinking long term into Bitcoin.

People who struggle most to realize value of Bitcoin is the middle-aged and the elderly especially the elderly. With people who are young, they are most adaptive in any nation, and in any era of human civilization history. It's basically how the young are from their physical body, mentality then mindset. They are young, ambitious, energetic, adaptive, and have a lot of time to fix mistakes. They are ready to learn, pay costs, and learn again until they find something great.

Fortunately with Bitcoin, it's not like costing them anything because if they choose Bitcoin for investment, they only have to spend money to buy bitcoin, and store their coins safely even in free open source non custodial wallets. No further cost for buying anything to store bitcoins, if they don't consider hardware wallets.

There is no cost of loss by mistake because Bitcoin investment is good, it's not a mistake.

I believe organisations as Bank already knows the value of Bitcoin but since it has not been generally approved that is the reason it usage seems to be slacking, in the sense that they will love to use it not only as collateral means but for other transactional means, but it is a good development that Bitcoin at least got to this level it will go further and will one day be fully accepted for other means, because I am sure Banks will not hasn't to include Bitcoin in the long and other businesses but since the government has not given the access to the people in some places it's use becomes a little slow.

I also made the same argument that MARA has other businesses and infrastructure on which it can take loans and use that money to buy BTC or whatever they do. But its main focus has shifted to AI data centers because of the profits, and it is not selling its coins for its other ventures. Instead, it is taking loans against them.

Using BTC, they are playing a very good card here. Selling means losing big in the long term, so they are not letting go of any opportunity they have grasped. Real corporate move haha.