- Members can choose repayment schedules of 30, 90, 180 or 365 days, with no penalties for early repayment, providing them with greater control over their finances.
- This product addresses the growing need for responsible lending solutions while retaining the long-term value of Bitcoin holdings.
GIBRALTAR – On March 18, Xapo Bank, the only fully licensed bank that makes it easy for its members to bank with Bitcoin, announced that it now offers its members access to Bitcoin-backed loans.
This new product empowers qualifying members to leverage their Bitcoin holdings as collateral to access credit without having to sell their Bitcoin. The product will initially offer several key features to protect members’ investments and aims to simplify borrowing while enabling qualifying members to retain their Bitcoin as a long-term financial instrument.
Whether facing unexpected home repairs, covering emergency costs or managing other temporary financial gaps, crypto assets are often the first to be sold when liquidity is needed. By using Bitcoin as collateral, qualifying Xapo Bank members can access USD funds without selling their assets. This preserves the potential for long-term appreciation of their Bitcoin investments and offers lower short-term loan rates compared to typical credit card providers while benefiting from flexible repayment terms and robust security measures.
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.
Seamus Rocca, CEO of Xapo Bank, commented, "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. That's why we're doing things differently at Xapo Bank. With over a decade of experience, we've built a lending product our members can trust. We give our members the flexibility to pursue their long-term investment strategy while still accessing their Bitcoin's value when needed. This is what Bitcoin is meant to be, not just a powerful store of value, but an asset that puts financial control back in your hands.”
Upon approval, funds are instantly deposited into the member's USD bank account, while the corresponding Bitcoin value is securely held in a vault until the loan is repaid. 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 minimize costs.
A conservative 20%-40% Loan-to-Value (LTV) ratio safeguards members’ Bitcoin, while a Loan Health Tracker provides real-time insights into loan status and potential risks. Automated repayment support and the option to add additional collateral further enhance security and flexibility for members and position Xapo Bank’s lending products apart from riskier crypto asset lending products currently on the market.
Qualifying members seeking to borrow more than their pre-approved amounts can speak to their account managers, for loans available up to $1,000,000 for up to one year pending an affordability check and subject to certain criteria.
