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Xapo Bank has announced the launch of a new lending service that allows its members to access USD loans backed by Bitcoin holdings. This move is aimed at catering to long-term Bitcoin holders, often referred to as "hodlers," who prefer to retain their cryptocurrency investments without liquidating them for cash needs. With this new offering, Xapo Bank provides its members with an opportunity to leverage their Bitcoin assets as collateral while maintaining ownership and potential upside.
According to the company, members can now secure US dollar loans by pledging their Bitcoin, without the need to sell or convert it. The bank assures users that their Bitcoin will remain safeguarded in Xapo’s vaults, which are known for their robust security standards. This initiative is designed to offer liquidity for those who are heavily invested in Bitcoin but require fiat currency for expenses, investments, or other financial needs.
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Source: Xapo Bank
Xapo Bank claims its new loan product is simple and transparent, with competitive interest rates and no hidden fees. Borrowers can repay the loan in USD, and once the repayment is completed, their Bitcoin collateral will be released in full. The service aims to provide flexibility and financial freedom, enabling Bitcoin holders to access cash without giving up their exposure to the cryptocurrency market’s potential growth.
The move aligns with Xapo Bank’s strategy to integrate traditional banking services with the evolving digital asset economy. As the demand for crypto-backed financial services increases globally, Xapo Bank hopes to attract a new segment of customers seeking innovative solutions that bridge the gap between crypto assets and conventional banking. The Bitcoin-backed loan product is now available to eligible members through Xapo’s platform, marking another step in the convergence of digital assets with mainstream financial services.