Xapo Bank announced a latest loan service that lets customers use their Bitcoin as collateral, marking one other step in cryptocurrency’s move toward mainstream financial services.
The service allows qualified members to borrow as much as $1 million against their Bitcoin holdings, though UK and Australian clients are excluded.
Major Wall Street Firms Join Bitcoin Financing Race
Xapo Bank has grow to be known in the traditional banking sector as an early adopter. Throughout the pandemic-driven BTC frenzy, it became one in all the primary banks to open a physical headquarters in Europe by settling in Gibraltar, a British overseas territory.
Conventional financial powerhouses are entering the market as cryptocurrency becomes more popular in america. Renowned financial bank Cantor Fitzgerald has established a Bitcoin finance section on their very own.
In line with sources, the corporate has partnered with crypto corporations Anchorage Digital and Copper.co to assist its expanding global Bitcoin operation.
Last 12 months, the bank received regulatory license within the UK and began providing interest-bearing BTC accounts as well as to straightforward banking services.
Xapo Bank Debuts Bitcoin Loans, Calls Out ‘Predatory’ Crypto Lenders
The private bank’s latest service allows customers to access as much as $1 million in Bitcoin-backed debt.
Read more: https://t.co/rBhwnAHu7g pic.twitter.com/qPtcWOrDgA— Mars Signals (@MarsSignals) March 18, 2025
Coinbase Revives Bitcoin-Backed Loans Through Latest Partnership
Coinbase previously offered digital currency-backed loans but stopped the service in 2023. The corporate has now restarted lending through a partnership with Morpho Labs, using decentralized lending protocols.
Their current service allows US users (except those in Latest York) to borrow as much as $100,000 in USDC stablecoins.
BTCUSD trading at $83,618 on the day by day chart: TradingView.com
Max Branzburg, Coinbase’s vp, stated that the product goals to enhance the crypto’s usefulness in a decentralized setting. The service streamlines borrowing by eliminating credit checks and costs, though borrowers must regulate their collateral value to avoid liquidation.
The brand new Coinbase service runs on Base, the corporate’s Ethereum layer-2 network. When customers take out loans, their crypto collateral is mechanically converted to Coinbase Wrapped Bitcoin (cbBTC), a token backed one-to-one by BTC held in Coinbase custody.
Image: Gemini Imagen
Centralized Vs. Decentralized: Different Approaches To Crypto Lending
While some services use decentralized finance (DeFi) protocols, Xapo represents a more traditional, centralized approach. Customers must first get approval from the bank, and their Bitcoin is stored “in a vault until the loan is paid back,” with loan terms extending up to at least one 12 months.
Seamus Rocca, CEO of Xapo, acknowledged that many long-term crypto holders became wary of crypto-backed lending after witnessing “predatory lending and faulty products” out there. “That’s why we’re doing things otherwise,” he said.
These services mostly help Bitcoin holders to accumulate money without selling their assets and generating taxable transactions.
Featured image from Gemini Imagen, chart from TradingView
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