Gibraltar-based Xapo Bank has announced the launch of a new service—Bitcoin-backed lending. This initiative provides long-term BTC holders the opportunity to access U.S. dollar loans without selling their assets.
Features of Xapo's Lending Services
The bank offers loans up to $1 million with repayment terms of 30, 90, 180, or 365 days without penalties for early repayment. Bitcoins used as collateral are stored in Xapo's institutional-grade vault and are not rehypothecated.
Reasons for Xapo Entering the Bitcoin Lending Market
Xapo's entry is driven by growing demand for Bitcoin-backed loans, particularly among high-net-worth individuals and institutional investors. CEO Seamus Rocca highlighted that borrower trust was shaken after the collapse of companies like Celsius and BlockFi, yet interest in such services has rekindled.
Crypto-Lending Market and Xapo Innovations
Xapo has become the first UK bank to offer interest-bearing bitcoin and fiat accounts. The platform provides 1% interest on bitcoin without the need to stake and allows debit card payments. Clients can also invest in S&P 500 stocks, purchase select cryptocurrencies, and use stablecoin payment rails. In 2023, Blockstream also entered the crypto-lending market, securing multi-billion investments into new institutional funds.
By launching this new service, Xapo aims to provide long-term liquidity for Bitcoin holders, possibly boosting interest in crypto-lending as the industry continues to evolve.
