Gibraltar-based Xapo Bank has introduced a new USD loan service backed by Bitcoin. This move underlines the bank's confidence in the revival of crypto lending and support for long-term investments.
Details and Eligibility For Xapo Bank Loan
The new offering is designed for long-term BTC holders, providing access to up to $1 million loans secured only by their Bitcoin holdings. Xapo Bank CEO Seamus Rocca highlighted that investors prefer Bitcoin as collateral over traditional assets. Bitcoin is "borderless, highly liquid, available 24/7, and easily divisible, making it uniquely suited for lending," he noted. To determine clientele eligibility, the bank will consider the amount and period of Bitcoin holdings. The most suitable candidates are long-term BTC holders with a long-term investment strategy. Qualified Xapo customers can choose a repayment schedule from options of 30, 90, 180, or 365 days, with no penalties for early repayment.
Crypto Firms Implosion Displaces Investors’ Trust
Investor confidence in the crypto industry has significantly diminished over the past years. The numerous industry collapses in 2022 contributed to this, as top centralized crypto firms like Celsius Network, FTX, Voyager Digital, and BlockFi imploded, leading to the harsh crypto winter that year. "Many long-term bitcoin holders have steered away from crypto-asset-backed lending after seeing predatory lending practices and products they couldn’t count on," Rocca said.
Crypto Industry Attempts to Redeem its Image
Since 2022, crypto firms have explored strategies to rebuild customer confidence. Unlike some imploded institutions, Xapo Bank is regulated by the Gibraltar Financial Services Commission under the Financial Services Act 2019. The firm is leveraging this license, hoping to bring investors back to the burgeoning sector. Rocca believes that the firm can achieve its goal with Bitcoin, citing the features of the flagship cryptocurrency, including its capacity to return financial control to investors. Moreover, comprehensive crypto regulation is emerging globally, making digital asset offerings more attractive to investors. The US is currently pioneering this movement.
Xapo Bank, regulated in Gibraltar, supports the revival of crypto lending by offering Bitcoin-backed loans. This not only strengthens trust in the crypto industry but also reflects efforts to return control to investors.
