Collateral wallet is 2-3 multi-signature wallet but it doesn’t have to be Monero. Bitcoin multi-signature is much more tested and very ease to use using Electrum or similar.
Option two on this topic would be to use Monero multi-signature to keep Collateral.
Could you add your comment(s) to the thread so that they can read them? (I’m not the author of the proposal, only shared a link.)