Ledger has introduced Crypto Loan, a self-custodial feature within its wallet app that enables eligible users to pledge wrapped Bitcoin as collateral to borrow stablecoins like USDC or USDT. The service, powered by Morpho via Yield.xyz, allows users to manage loans directly from their Ledger devices without needing browser extensions, deepening the company's foray into financial services.
The launch of Crypto Loan by Ledger offers Bitcoin holders a way to access liquidity without selling their assets or moving them to centralized exchanges, potentially appealing to those seeking to avoid taxable events and maintain self-custody. This move also signals a growing trend of established crypto infrastructure providers expanding into decentralized finance services.
Ledger has introduced a new self-custodial lending feature within its wallet app, allowing users to borrow stablecoins by pledging their wrapped Bitcoin as collateral. The Crypto Loan service, unveiled at the TOKEN2049 conference in Singapore, aims to provide access to liquidity without requiring users to move funds to centralized platforms or sell their underlying assets.
The feature enables eligible users to pledge wrapped Bitcoin, such as cbBTC or wBTC, to borrow USDC or USDT. All loan management, including tracking loan-to-value ratios, adding collateral, and repaying loans, can be done directly within the Ledger Wallet. Crucially, all significant actions require physical approval on a Ledger hardware device before execution, enhancing security.
This initiative is powered by the decentralized credit network Morpho, with Yield.xyz serving as the technical provider. This is the same provider that Coinbase utilizes for its Bitcoin-backed loans. In a separate announcement, Ledger also revealed direct access for its hardware signers to Morpho, eliminating the need for browser extensions or software wallets when connecting to the protocol.
Morpho co-founder Paul Frambot highlighted the integration's potential to create a "powerful liquidity flywheel," suggesting that stablecoins deposited through Ledger's existing Earn product could fund these new Bitcoin-backed loans. This move signifies Ledger's deepening involvement in financial services within the cryptocurrency space, joining other major players like Coinbase, which offers fixed-rate Bitcoin loans, and JPMorgan, which has explored similar lending products.
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