Gibraltar-based private bank Xapo is now accepting members' Bitcoin as collateral for loans, allowing customers to access up to $1 million in Bitcoin-backed debt. The service is available in most regions except the UK and Australia. Xapo, established in 2013, is expanding its services as Wall Street...
Gibraltar-based private bank Xapo is now accepting members' Bitcoin as collateral for loans, allowing customers to access up to $1 million in Bitcoin-backed debt. The service is available in most regions except the UK and Australia.
Xapo, established in 2013, is expanding its services as Wall Street firms like Cantor Fitzgerald enter the Bitcoin financing business. The bank, headquartered in Gibraltar, gained regulatory approval in the UK last year. In the US, Bitcoin-backed lending has made a return, with companies like Coinbase restarting them in January.
Xapo customers need approval, and their Bitcoin is held in a vault until the loan is repaid, which can last up to a year. The crypto lending industry faced challenges following high-profile bankruptcies, but Xapo aims to differentiate itself with ethical practices.
Founded by Wences Casares, Xapo is known for its pioneering role in Bitcoin. The bank's customers must undergo a verification process before they can access the loan facility. The Bitcoin used as collateral is securely stored in Xapo's vault until the loan is fully repaid.
Xapo's decision to accept Bitcoin as collateral for loans signifies a growing trend in the finance industry towards incorporating digital assets into traditional banking practices. This move not only provides customers with access to liquidity using their Bitcoin holdings but also highlights the increasing acceptance of cryptocurrencies within mainstream financial institutions.
As more institutions like Xapo enter the crypto lending space, it underscores the maturation and integration of digital currencies into the global financial system. This innovative approach by Xapo showcases the evolving landscape of banking and highlights the potential for blockchain technology to revolutionize traditional financial services.
Overall, Xapo's initiative to offer Bitcoin-backed loans demonstrates a progressive outlook on emerging financial technologies and sets a precedent for other banks to explore similar opportunities in leveraging digital assets for lending purposes.