Xapo Bank, a Gibraltar-based global cryptocurrency bank, is betting on a crypto loan revival by launching Bitcoin-backed U.S. dollar loans.
Qualified Xapo Banking Customers now have access to Bitcoin (BTCThe company said in a March 18 announcement with Cointelegraph that it had a loan of up to $1 million.
New Loan Products Designed for a long-term Bitcoin Hodel Xapo Bank CEO Seamus Rocca told Cointelegraph that he wanted to get cash while retaining BTC.
“Unlike traditional assets, Bitcoin is the ideal form of collateral – it is borderless, highly liquid, available 24/7 and prone to splitting, making it perfect for lending,” Rocca said.
No reuse included
A major difference between Xapo’s Bitcoin loan product is that the bank will not reuse users’ loan collateral, meaning its lending mechanism does not involve the reuse of BTC assets by customers.
Instead, Bitcoin collateral is stored in Xapo’s BTC library Multi-party computing (MPC) Guardianship.
Crypto loan platform work.
The company said eligible XAPO customers can choose a 30, 90, 180 or 365-day repayment schedule without penalty for early repayment.
Who is eligible?
Xapo’s new Bitcoin loan issuance will be available to pre-approved members based on several standards.
The main criteria for eligibility are the amount and holding period of Bitcoin, as XAPO has a long-term investment strategy specifically for long-term BTC holders.
according to For banks, products will be provided to global investors in regions such as Europe and Asia, excluding residents in the United States.
List of jurisdictions supported by Xapo Bank. Source: Xapo Bank
Xapo Bank is Regulated By the Financial Services Act 2019 under the Financial Services Commission of Gibraltar. In 2024, the bank successfully Used a bank license in the UKgranting its Xapo Bank app full access to the country.
While Xapo’s loans are offered throughout the European Union, crypto loans are not covered by local regulations The market for crypto assets frame.
Revival after countless collapses
Xapo Bank’s new BTC loan launch comes years after the crypto lending industry suffered a major crisis in 2022.
The crisis happened in The historic Terra collapses and The subsequent bear market This triggered a crash for major loan providers Celsius and blockfi.
“The collapse of Celsius, Blockfi and other centralized lenders has seriously eroded trust in the crypto lending space,” Xapo Bank CEO told Cointelegraph.
An example of the Bitcoin loan process on the XAPO banking application. Source: Xapo Bank
“Today, platforms that have a reliable track record in Bitcoin custody and provide secure, transparent solutions prioritize platforms, especially those that are not engaged in re-raising solutions,” Rocca added.
“At the same time, demand for Bitcoin-backed loans is rising, especially among high-net-worth individuals and institutional investors seeking liquidity without selling Bitcoin holdings.”
In addition to removing asset re-domination and MPC security, XAPO also provides risk management tools and proactive protection to prevent automatic liquidation.
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“If the price of Bitcoin falls, customers will receive instant notifications allowing them to fill up their collateral or make partial repayments to maintain their loan status,” Rocca noted.
Xapo isn’t the only company working to introduce loan products in 2025. In early March, Bitcoin developers BlockStream gets billions of dollars in investment To launch three new institutional funding, two of which offer BTC loans.
