Xapo Bank, a Gibraltar-based financial institution regulated by the Gibraltar Financial Services Commission, has introduced USD loans collateralized by Bitcoin, enabling customers to borrow up to $1 million without selling their cryptocurrency holdings. The service targets long-term Bitcoin investors seeking liquidity while maintaining exposure to the digital asset’s potential appreciation. Loan terms range from 30 to 365 days, with no penalties for early repayment, and borrowers can select flexible repayment schedules.
To qualify, applicants must meet eligibility criteria based on Bitcoin holdings and ownership duration, prioritizing those committed to a long-term Bitcoin strategy. Approved clients gain access to credit lines with loan-to-value ratios of 20–40%, ensuring collateral remains securely stored in Xapo’s institutional-grade multiparty computation (MPC) custody vaults. Unlike some legacy crypto lenders, Xapo explicitly prohibits rehypothecation, meaning Bitcoin collateral is not reused for other financial activities. CEO Seamus Rocca emphasized the bank’s focus on transparency and trust, addressing past industry concerns linked to platforms like Celsius and BlockFi, which collapsed during 2022’s market downturn.
The service excludes residents of the U.S., U.K., and Australia but is available to investors across Europe and Asia. Xapo Bank, which passportied its banking license to the U.K. in 2024, implements automated risk management tools, including real-time price-drop notifications that allow borrowers to adjust collateral or make partial repayments. The launch reflects growing institutional interest in Bitcoin-backed financial products, with Rocca noting rising demand from high-net-worth individuals and firms seeking liquidity solutions that avoid asset liquidation.
Sources:
https://www.crowdfundinsider.com/2025/03/237512-xapo-bank-now-offers-usd-loans-backed-by-bitcoin/
https://www.bitget.com/news/detail/12560604648748
https://www.ainvest.com/news/xapo-bank-launches-bitcoin-backed-usd-loans-hodlers-2503
https://bitmarkets.com/en/insights/article/bank-launches-bitcoin-backed-usd-loans
https://www.ainvest.com/news/xapo-bank-launches-bitcoin-backed-loans-expanding-services-2503/
https://cryptodaily.co.uk/2025/03/gibraltar-based-bank-launches-bitcoin-collateral-loans
