Xapo Bank, a World Bank adapted to cryptocurrency whose headquarters are in Gibraltar, bet on the revival of cryptographic loans by launching loans in US dollars supported by Bitcoin.
XAPO Bank’s qualified customers can now access Bitcoin loans (BTC) up to $ 1 million, the firm said in a shared announcement with Cointtelegraph on March 18.
The new loan product is designed for long -term Bitcoin Hodlers who wish to access Cash while keeping their BTC, the CEO of Xapo Bank, Seamus Rocca told Cointelegraph.
“Unlike traditional active ingredients, Bitcoin is an ideal form of guarantee – it is borderless, very liquid, available 24/7 and easily divisible, making it only suitable for loans,” said Rocca.
No collateral reuse
A key distinction of Xapo Bitcoin loan product is that the bank does not rechyprothecate the guarantee of loans by users, which means that its loan mechanism does not imply the reuse of BTC assets by customers.
Instead, the Bitcoin warranty is stored in the XAPO BTC safe using the institutional multi-party calculation (MPC).
Operation of a cryptographic loan platform.
Eligible XAPO customers can choose reimbursement calendars of 30, 90, 180 or 365 days, without penalties for early reimbursement, said the firm.
Who is eligible?
Xapo’s new Bitcoin loan offer will be available for pre-approved members according to several criteria.
The key admissibility criteria are the quantity of Bitcoin holders and the period of assets, because XAPO specifically targets long -term BTC holders with a long -term investment strategy.
According to the bank, the offer will be available for 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
The XAPO bank is regulated by the Gibraltar Financial Services Commission under the Financial Services ACT 2019. In 2024, the bank managed to pass its banking license in the United Kingdom, granting its application of XAPO a full access to the country.
Although Xapo loans are offered across the European Union, cryptographic loans are not covered by local regulations such as markets in Crypto-Astets.
A renewal following many collapses
Xapo Bank BTC’s new BTC loan launched a few years after the cryptography loans has undergone a major crisis in 2022.
The crisis occurred in the middle of the historic terra accident and a lowering market which triggered the collapse of main loan suppliers like Celsius and Blockfi.
“The collapse of Celsius, Blockfi and other centralized lenders has considerably eroded confidence in the crypto loan space,” the CEO of Xapo Bank told Cointelegraph.
An example of the Bitcoin loan process on the Xapo Bank application. Source: Xapo Bank
“The borrowers are today making greater caution, prioritizing platforms with a proven assessment in the Bitcoin Guard and those who offer secure and transparent solutions – in particular those that do not engage in rechyprothecation,” said Rocca, adding:
“At the same time, the demand for loans supported by Bitcoin is increasing, especially among individuals and institutional investors who are looking for liquidity without selling their Bitcoin farms.”
In addition to removing the reaffirmation of assets and MPC security, XAPO offers risk management tools and proactive protection to prevent automatic liquidations.
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“In the event of a drop in bitcoin prices, customers receive instant notifications, allowing them to recharge their warranty or make partial reimbursements to maintain their loan status,” noted Rocca.
Xapo is not the only company to work to introduce loan products in 2025. At the beginning of March, the developer Bitcoin Blockstream obtained an investment of several billion dollars to launch three new institutional funds, two of which offering BTC loans.
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