Xapo Bank, based in Gibraltar, has introduced Bitcoin-backed US dollar loans aimed at long-term holders of Bitcoin. The new offering allows pre-approved customers to access loans of up to $1 million while retaining their Bitcoin holdings. Xapo’s CEO, Seamus Rocca, emphasized that Bitcoin serves as an optimal collateral given its borderless nature, liquidity, and divisibility. Unlike traditional lending platforms, Xapo does not rehypothecate the collateral, opting instead to hold it securely in their vault. Eligible clients can opt for various repayment schedules ranging from 30 to 365 days with no early repayment penalties. This service is targeted primarily at long-term investors, and while it extends to multiple regions, it does not include the United States. The launch comes on the heels of a significant crisis in the crypto lending sector in 2022, during which major firms collapsed, leading to diminished trust. Rocca noted that demand for Bitcoin-backed loans remains strong, especially from affluent individuals and institutional investors looking for liquidity without liquidating their assets.

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