Xapo Bank, a global cryptocurrency-friendly bank, has launched USD loans secured by Bitcoin (BTC) for its clients.
Features of the Offering
Xapo Bank clients can now access loans up to $1 million backed by Bitcoin. The offering is designed for long-term BTC holders needing cash without selling their assets. A key distinction lies in the bank not rehypothecating collaterals. Bitcoin is stored in Xapo's BTC vault utilizing institutional MPC custody. Clients can choose repayment schedules of 30, 90, 180, or 365 days, with no penalties for early repayment.
Who is Eligible?
The lending offering will be available to pre-approved members based on criteria like Bitcoin holdings amount and duration. Xapo targets long-term investors. The service is offered to clients in regions such as Europe and Asia, excluding US residents. Xapo Bank is regulated by the Gibraltar Financial Services Commission and has passported its license to operate in the UK.
Revival After a Crisis
Xapo’s new BTC loan comes a few years after a major crisis in the crypto lending industry in 2022. The collapse of platforms like Celsius and BlockFi significantly eroded trust. Borrowers now prefer platforms with a proven track record in BTC custody, offering secure solutions without asset rehypothecation. Xapo Bank provides risk management tools, such as notifications for Bitcoin price drops, allowing collateral top-ups or partial loan repayments.
Xapo Bank’s introduction of Bitcoin-backed loans marks a revival in crypto lending post-crisis, focusing on security and transaction transparency.
