Xapo Bank launches Bitcoin-backed USD loans targeting hodlers
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 clients.
Instead, the Bitcoin collateral is stored in Xapo’s BTC vault using institutional multiparty computation (MPC) custody.
Working of a crypto lending platform.
Eligible Xapo clients can choose repayment schedules of 30, 90, 180 or 365 days, with no penalties for early repayment, the firm said.
Who is eligible?
Xapo’s new Bitcoin lending offering will be available to pre-approved members based on several criteria.
The key criteria for eligibility are the amount of Bitcoin holdings and the period of holdings, as Xapo specifically targets long-term BTC holders with a long-term investment strategy.
According to the bank, the offering will be available to global investors in regions like Europe and Asia, excluding residents of the United States.
The list of jurisdictions supported by Xapo Bank. Source: Xapo Bank
Xapo Bank is regulated by the Gibraltar Financial Services Commission under the Financial Services Act 2019. In 2024, the bank successfully passported its banking license in the United Kingdom, granting its Xapo Bank App full access to the country.
While Xapo’s lending is offered across the European Union, crypto lending is not covered by local regulations like the Markets in Crypto-Assets framework.
A revival following numerous collapses
Xapo Bank’s new BTC loan launch comes a few years after the crypto lending industry suffered a major crisis in 2022.
The crisis came amid the historic Terra crash and a subsequent bear market that triggered the collapses of major lending providers like Celsius and BlockFi.
“The collapse of Celsius, BlockFi, and other centralized lenders significantly eroded trust in the crypto lending space,” Xapo Bank CEO told Cointelegraph.
An example of the Bitcoin lending process on the Xapo Bank App. Source: Xapo Bank
“Borrowers today exercise greater caution, prioritizing platforms with a proven track record in Bitcoin custody and those that offer secure, transparent solutions — especially ones that do not engage in rehypothecation,” Rocca said, adding:
“At the same time, demand for Bitcoin-backed loans is on the rise, particularly among high-net-worth individuals and institutional investors who seek liquidity without selling their Bitcoin holdings.”
In addition to removing asset rehypothecation and MPC security, Xapo offers risk management tools and proactive protection to prevent automatic liquidations.
Related: Bitwise makes first institutional DeFi allocation
“In the event of a Bitcoin price drop, customers receive instant notifications, allowing them to either top up their collateral or make partial repayments to maintain their loan status,” Rocca noted.
Xapo is not the only firm that has been working to introduce lending products in 2025. In early March, Bitcoin developer Blockstream secured a multibillion-dollar investment to launch three new institutional funds, with two of them offering BTC lending.
Magazine: ETH may bottom at $1.6K, SEC delays multiple crypto ETFs, and more: Hodler’s Digest, March 9 – 15
Reform’s plan was meant to be detailed. Instead, there’s more confusion.
The party had grown weary of the longstanding criticism that their tough talk on immigration did not come with a full proposal for what they would do to tackle small boats if they came to power.
So, after six months of planning, yesterday they attempted to put flesh on to the bones of their flagship policy.
Politics latest: Farage rows back on pledge to deport illegal migrant women and girls
At an expensive press conference in a vast airhanger in Oxford, the headline news was clear: Reform UK would deport anyone who comes here by small boat, arresting, detaining and then deporting up to 600,000 people in the first five years of governing.
They would leave international treaties and repeal the Human Rights Act to do it
But, one day later, that policy is clear as mud when it comes to who this would apply to.
Nigel Farage launched an airport-style departures board to illustrate how many illegal migrants have arrived in the UK. Pic: PA
I asked Farage at the time of the announcement whether this would apply to women and girls – an important question – as the basis for their extreme policy seemed to hinge on the safety of women and girls in the UK.
He was unequivocal: “Yes, women and children, everybody on arrival will be detained.
“And I’ve accepted already that how we deal with children is a much more complicated and difficult issue.”
But a day later, he appeared to row back on this stance at a press conference in Scotland, saying Reform is “not even discussing women and children at this stage”.
Read more:
Farage has a new ‘leave’ campaign – here’s how it could work
He later clarified that if a single woman came by boat, then they could fall under the policy, but if “a woman comes with children, we will work out the best thing to do”.
A third clarification in the space of 24 hours on a flagship policy they worked on over six months seems like a pretty big gaffe, and it only feeds into the Labour criticism that these plans aren’t yet credible.
If they had hoped to pivot from rhetoric to rigour, this announcement showed serious pitfalls.
But party strategists probably will not be tearing out too much hair over this, with polling showing Reform UK still as the most trusted party on the issue of immigration overall.
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