Xapo Bank, a global cryptocurrency-friendly bank headquartered in Gibraltar, is betting on crypto lending revival by launching Bitcoin-backed US dollar loans.
Qualifying Xapo Bank clients can now access Bitcoin (BTC) loans of up to $1 million, the firm said in an announcement shared with Cointelegraph on March 18.
The new lending product is designed for long-term Bitcoin hodlers who want to access cash while keeping their BTC, Xapo Bank CEO Seamus Rocca told Cointelegraph.
“Unlike traditional assets, Bitcoin is an ideal form of collateral — it is borderless, highly liquid, available 24/7, and easily divisible, making it uniquely suited for lending,” Rocca said.
No collateral re-usage
A key distinction of Xapo’s Bitcoin loan product is that the bank does not rehypothecate the loan collateral by users, meaning that its lending mechanism does not involve the re-usage of BTC assets by