Overview
- Ledger has unveiled Crypto Loan, a feature in its wallet app enabling eligible users to use wrapped Bitcoin as collateral for borrowing USDC or USDT.
- The service is powered by Morpho through Yield.xyz, allowing Ledger devices to connect directly to Morpho without needing browser extensions.
- This latest initiative marks Ledger's expansion into financial services, aligning it with the growing trend of Bitcoin lending seen with firms like Coinbase and JPMorgan.
Ledger is providing Bitcoin holders with a method to access cash without selling their assets, thanks to a new self-custodial lending feature integrated within its wallet application that ensures final approval remains on the user's hardware device.
Launched on Wednesday during the TOKEN2049 conference in Singapore, the Crypto Loan feature allows qualified users to pledge wrapped Bitcoin—either in cbBTC or wBTC format—as collateral to secure loans in stablecoins like USDC or USDT.
Myriad: How high will Bitcoin go? Click to make your prediction.This feature aims to provide liquidity without requiring users to transfer funds to a centralized lending service or liquidate their underlying assets. Users can manage their loans within Ledger Wallet, monitor their loan-to-value ratio, add collateral, and adjust their borrowing—all actions must be approved on a Ledger signer before they are finalized.
The lending feature is supported by Morpho, a decentralized credit network, via the technical provider Yield.xyz, which also powers Coinbase's Bitcoin-backed loan offerings.
Additionally, Ledger announced that users can directly access Morpho through their signers, allowing for a connection with the protocol without the need for browser extensions or software wallets. Morpho co-founder Paul Frambot noted that this integration establishes "a powerful liquidity flywheel," where stablecoins deposited through Ledger's Earn product can fund the loans that Bitcoin holders are now able to obtain.
This strategic move further positions Ledger, traditionally known for its hardware wallets, deeper into the financial services sector and within a rapidly evolving segment of the cryptocurrency market.
Coinbase has also recently introduced fixed-rate Bitcoin-backed loans, expanding to users in the U.K., while JPMorgan has been investigating lending options against Bitcoin and Ethereum. The common incentive for these services is that crypto holders looking to benefit from potential price increases can borrow against their assets without triggering a taxable event. However, the risk remains that a sudden decrease in price could necessitate the liquidation of collateral.
Ledger, which claims to safeguard nearly 30% of all Bitcoin owned by retail investors, also took the opportunity at the Singapore event to introduce a limited-edition Nano Gen5 signer, created in collaboration with the NBA's San Antonio Spurs. This special edition is limited to 250 units and builds on a marketing partnership with the Spurs announced last year.
The Crypto Loan feature is set to be rolled out to eligible users immediately, with broader availability anticipated in the future.