Ledger claims to secure nearly 30% of all Bitcoin held by retail investors worldwide. The hardware wallet maker is now paving the way for users to borrow stablecoins through the launch of its Crypto Loan feature at TOKEN2049 Singapore. Asset holders can pledge wrapped Bitcoin (cbBTC or wBTC) without having to sell their original Bitcoin.
Users can draw USDC or USDT loans directly from within the Ledger Wallet app. Every action involving cryptographic keys must be approved via the hardware device’s physical buttons, ensuring asset custody always remains in the user’s hands. The key advantage of this system solves the liquidity unlocking challenge - borrowers do not need to move funds to centralized platforms, while also avoiding asset sales that often trigger tax bills.
Unifying the Liquidity Ecosystem
Decentralized credit network Morpho powers this new lending infrastructure, with Yield.xyz acting as technical provider. Yield.xyz also serves the Coinbase exchange for their Bitcoin-backed loan product. Complementing the service launch, Ledger opened a direct access route to Morpho for hardware users, allowing them to access credit without needing to install browser extensions or additional software wallets.
Morpho co-founder Paul Frambot noted that their integration generates a new liquidity loop. The mechanism is complementary: stablecoins deposited by customers through the Ledger Earn program now serve to fund loans drawn by Bitcoin holders.
Collateral Trends and Market Expansion
Using Bitcoin as loan collateral is increasingly being adopted by major institutions. Coinbase has already rolled out fixed-rate Bitcoin-backed loans after expanding product access to UK users. In the conventional banking sector, JPMorgan is also exploring lending options collateralized by Bitcoin and Ethereum.
Although Ledger offers a self-custodial system, the standard risks of crypto lending still apply. A sharp plunge in Bitcoin prices could at any time force the system to liquidate user collateral to cover debt positions.
Beyond financial products, Ledger announced the launch of a limited-edition Nano Gen5 wallet. The hardware, a collaboration with NBA basketball team San Antonio Spurs, is limited to just 250 units. The Crypto Loan feature is beginning to roll out to eligible users, with general availability expanding in the next phase.
Reported via Decrypt.
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Disclaimer: This article is for informational and educational purposes only, not financial advice. Cryptocurrency assets are highly volatile and carry significant risk. Always do your own research (DYOR) and never invest more than you can afford to lose.
