Xapo Bank, based in Gibraltar, has launched a new service allowing customers to secure loans backed by Bitcoin, offering up to $1 million in Bitcoin-backed debt. This service is notably not available for customers in the UK and Australia. Gadi Chait, an investment manager at Xapo, praised Bitcoin as a reliable form of collateral. Xapo has been safeguarding Bitcoin on behalf of its customers since 2013. The bank’s move comes as traditional financial firms enter the Bitcoin lending space, aiming to provide customers with more options. CEO Seamus Rocca highlighted the necessity to provide an alternative to predatory lending practices observed in the crypto industry, which have discouraged long-term Bitcoin holders from participating in crypto-asset-backed lending. Xapo's inaugural physical location was established during the cryptocurrency boom, and it has received regulatory approval in the UK for various banking services, including interest-bearing Bitcoin accounts. The bank intends to prioritize customer security by holding Bitcoin in vaults until loans are settled.

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