What happened
Xapo Bank has begun offering Bitcoin-backed USD loans, enabling liquidity without selling BTC. The program caps loans at up to $1 million per member and uses 1:1 custody with a no-rehypothecation policy, per Source.
How collateral stress can spread
Xapo says loan LTVs are conservative, ranging from 20% to 40% to guard against sudden price moves. Collateralized BTC sits in Xapo's BTC Vault and is never rehypothecated or lent out to third parties. The security stack includes MPC wallet technology to protect assets. The Gibraltar license as a credit institution and VASP, with UK passporting, anchors the product in traditional safety. There is a $1,000 annual membership fee for access to the premium ecosystem. Loans are deposited directly into the member's fiat USD bank account within the Xapo app. Assetify editorial: this structure prioritizes safety and trust in custody-based lending, but the no-rehypothecation stance may raise borrowing costs versus yield-focused platforms. CryptoSlate