Xapo Bank Introduces Bitcoin-Backed Loans, Revolutionizing the Crypto Credit Market

Xapo Bank has introduced a bitcoin-backed loan service, enabling qualifying members to secure USD loans without liquidating their bitcoin holdings.

Xapo Bank, a name synonymous with secure bitcoin storage, has revolutionized bitcoin finance with a game-changing loan service. Now, qualifying members can borrow up to $1M in USD without selling their BTC.

A New Era of Crypto Credit

The institution has introduced a bitcoin-backed loan service, allowing members to secure USD loans without liquidating their bitcoin holdings. Available through the Xapo Bank app, the offering provides access to up to $1 million in a service designed for transparency and flexibility.

“This new product empowers qualifying members to leverage their bitcoin holdings as collateral to access credit without having to sell their bitcoin,” the bank noted.

As reported by Rocca, the service is a response to a need highlighted by the community:

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. They prefer to keep their bitcoin and sell it only when they choose.

In contrast, Xapo Bank stated that it maintains a conservative loan-to-value ratio of 20%-40%, provides automated repayment options, and has a Loan Health Tracker for real-time monitoring.

“After applying for the loan, eligible members with sufficient bitcoin holdings can use the in-app calculator to determine their borrowing limit. During the application process, members can select their desired loan amount, with personalized limits of up to $1,000,000, while having complete visibility of the final repayment amount and applicable interest rate,” the bank explained.

After approval, funds are deposited into members’ USD bank accounts while the bitcoin collateral remains securely stored. The service offers multiple repayment options, with the bank adding:

“Members can enjoy flexible repayment terms of 30, 90, 180 or 365 days, and the option to repay early, with no penalties or early repayment fees, to minimise costs.”

For borrowers requiring higher loan amounts, they can consult their account managers for personalized assessments.

Regulated by the Gibraltar Financial Services Commission, Xapo Bank continues to expand its services and offerings.