Gibraltar-based Xapo Bank has announced US dollar-based loans backed by Bitcoin.
According to the bank, their customers may access credit of up to $1 million, secured by Bitcoin holders. Terms range from 30 days and up to a year. No penalties for early repayment.
By allowing Bitcoin to be used as collateral, Xapo Bank says they are encouraging Bitcoin as a long term asset.
Seamus Rocca, CEO of Xapo Bank, says that many Bitcoin holders do not utilize crypto asset backed lending due to “predatory lending practices” on dodgy products.
“With over a decade of experience, we’ve built a lending product our members can trust,” said Rocca. “We give our members the flexibility to pursue their long-term investment strategy while still accessing their Bitcoin’s value when needed. This is what Bitcoin is meant to be, not just a powerful store of value, but an asset that puts financial control back in your hands.”
Bitcoin used as collateral are held in a vault until the loan is repaid. Xapo says Loan to Value ranges from 20% to 40%.
Xapo Bank is regulated by the Gibraltar Financial Services Commission. Xapo is a VASP designated as a ‘DLT institution.’ Xapo Bank has successfully passported its banking license to the UK, granting Xapo Bank App full access to the UK and City of London based on the equivalency status recognised by the UK authorities.
