Xapo Bank Introduces Bitcoin-Backed USD Loans Up to $1 Million

Xapo Bank, a cryptocurrency-friendly bank based in Gibraltar, has launched Bitcoin-backed US dollar loans on March 18. This new lending product allows pre-approved customers to access loans of up to $1 million while keeping their Bitcoin holdings.

The service targets long-term Bitcoin holders who want to unlock cash value from their cryptocurrency without selling. Seamus Rocca, CEO of Xapo Bank, told Cointelegraph that Bitcoin serves as "an ideal form of collateral" due to its borderless nature, high liquidity, 24/7 availability, and divisibility.

A key feature of Xapo's loan offering is that it does not rehypothecate client collateral. This means the bank doesn't reuse customers' Bitcoin assets for other purposes. Instead, all Bitcoin collateral is stored in Xapo's vault using institutional multiparty computation custody technology.

Eligible clients can select from several repayment schedules: 30, 90, 180, or 365 days. The bank does not charge penalties for early repayment, giving borrowers flexibility in managing their loans.

The lending service will be available to global investors in regions including Europe and Asia, but excludes US residents. Eligibility depends primarily on:

• Amount of Bitcoin holdings
• Duration of Bitcoin ownership

This launch comes after the crypto lending industry faced major setbacks in 2022, when providers like Celsius and BlockFi collapsed following the Terra crash and subsequent market downturn. Rocca noted that borrowers now look for platforms with proven custody track records and transparent solutions.

Xapo Bank is regulated by the Gibraltar Financial Services Commission and has passported its banking license to the United Kingdom in 2024. The bank offers risk management tools and sends instant notifications if Bitcoin prices drop, allowing customers to add collateral or make partial repayments to maintain their loan status.

The Xapo Bank launch parallels other global developments in cryptocurrency adoption. In Brazil, Federal Deputy Luiz Philippe de Orleans e Bragança recently introduced legislation that would allow employers to pay up to 50% of wages in cryptocurrencies. This bill (PL 957/2025) requires the remainder to stay in Brazilian real and mandates using exchange rates established by Central Bank-authorized institutions.