Xapo Bank has launched Bitcoin-backed loans, giving long-term holders the ability to secure liquidity without selling their BTC. This initiative provides investors with a way to leverage their Bitcoin holdings while maintaining exposure to potential price growth.
Xapo Bank guarantees that Bitcoin used as collateral stays safely kept and is not rehypothecated, unlike conventional lending platforms, therefore preventing the bank from lending out or reusing client assets. Held in an institutional-grade vault, the BTC collateral provides further protection and openness.
With no penalties for early payback, eligible borrowers can select from flexible 30, 90, 180, or 365-day repayment options. Currently confined to pre-approved customers outside of the United States, the business emphasizes mostly markets in Europe and Asia.
This action coincides with the return of crypto lending following a stormy 2022 marked by significant player collapses, including Celsius and BlockFi. Although trust in crypto lending suffered during that period, Xapo Bank CEO Seamus Rocca noted, demand is again growing particularly among institutional investors seeking liquidity without surrendering their shares and high-net-worth individuals.
Xapo provides real-time alerts if Bitcoin’s price declines to let borrowers top off their collateral or make repayments to prevent liquidation and thereby reduce risks. To provide a safe loan experience, the bank has also put rigorous risk management policies and security systems into place.
Xapo is positioned as a trustworthy and safe choice for Bitcoin-backed loans as crypto lending picks up steam once more. Focusing on openness, security, and adaptability, the bank is appealing to long-term BTC holders seeking financial freedom while keeping their assets.
