Gibraltar-based Xapo Bank announced a new Bitcoin-backed loan service on March 18, allowing eligible customers to borrow up to $1 million in US dollars while retaining ownership of their cryptocurrency holdings. The service excludes residents of the UK, Australia, and the United States, targeting long-term Bitcoin investors in Europe and Asia who seek liquidity without selling their assets.
Xapo CEO Seamus Rocca described Bitcoin as “an ideal form of collateral” due to its liquidity, 24/7 market availability, and global accessibility. Loans will be secured through institutional-grade multiparty computation custody, with Bitcoin stored in the bank’s vaults and not reused for other financial activities. Borrowers can choose repayment periods of 30, 90, 180, or 365 days, with no penalties for early repayment. The bank also introduced a real-time loan health tracker to monitor collateral ratios and repayment deadlines.
The launch follows the collapse of major crypto lending platforms like Celsius in 2022, with Xapo emphasizing safeguards such as a conservative 20-40% loan-to-value ratio to minimize liquidation risks. Rocca stressed the bank’s commitment to transparency, contrasting its approach with past industry practices of “predatory lending and faulty products.” Xapo’s entry into the market aligns with renewed interest in crypto-backed loans, including Coinbase’s relaunch of similar services in January 2025 through decentralized protocols.
Regulatory milestones underpin the initiative, including Xapo’s 2024 approval by UK authorities to offer interest-bearing Bitcoin accounts. The bank positions itself as a bridge between traditional finance and cryptocurrency, leveraging its physical presence in Gibraltar and decade-long custody expertise.
Sources:
https://www.eblockmedia.com/news/articleView.html?idxno=15165
https://www.mitrade.com/insights/news/live-news/article-3-707986-20250320
https://btcpeers.com/xapo-bank-introduces-bitcoin-backed-usd-loans-up-to-1-million/
https://bitmarkets.com/en/insights/article/bank-launches-bitcoin-backed-usd-loans
https://bitcoinnews.com/adoption/xapo-bank-bitcoin-backed-loans/
