Ledger has introduced Bitcoin-backed cryptocurrency loans directly inside its Ledger Wallet application, allowing eligible users to borrow stablecoins without selling their Bitcoin exposure. The feature, called Crypto Loan, was unveiled on October 7, 2026, during the TOKEN2049 conference in Singapore. It integrates decentralized lending infrastructure from Morpho through technology provider Yield.xyz, bringing borrowing and collateral management into Ledger’s existing wallet interface. Users can pledge wrapped Bitcoin assets, specifically Coinbase Wrapped BTC (cbBTC) or Wrapped Bitcoin (WBTC), to borrow either USD Coin (USDC) or Tether (USDT).The launch marks another expansion beyond Ledger’s traditional hardware-wallet business into financial services built around self-custody. However, Ledger is not directly issuing loans or acting as the lender. Its application provides access to Morpho’s onchain lending markets, while Yield.xyz handles the technical integration. Availability is restricted to eligible users in supported jurisdictions, with the new borrowing feature being introduced gradually.
How Ledger’s Bitcoin-Backed Loans Work
The borrowing process allows users to deposit eligible wrapped Bitcoin as collateral and receive stablecoins without selling their underlying cryptocurrency exposure. Once a loan is established, borrowers can monitor their loan-to-value ratio, add collateral, make repayments, increase borrowing or withdraw available collateral directly through Ledger Wallet. The application also provides a simulation feature that allows users to examine borrowing conditions before committing funds. Ledger’s hardware devices remain responsible for approving transactions. Its Clear Signing technology displays supported transaction details in a human-readable format, requiring physical confirmation before blockchain interactions are authorized.The company emphasizes that private keys remain offline inside the device’s Secure Element. Nevertheless, the underlying collateral is committed to smart contracts, introducing risks distinct from ordinary Bitcoin storage. The service uses wrapped representations of Bitcoin rather than native BTC held directly on the Bitcoin blockchain. These assets depend on tokenization infrastructure and the relevant blockchain networks. Borrowing costs are variable and depend on conditions within individual Morpho lending markets. Reported initial markets include USDC borrowing against cbBTC and USDT borrowing against WBTC, each with an 86% liquidation loan-to-value threshold. That figure represents a liquidation parameter, not a recommended borrowing level. A decline in Bitcoin’s price, accumulating interest or changes in collateral valuation can trigger liquidation before a borrower repays the loan.
Ledger Expands Beyond Hardware Wallets
Alongside Crypto Loan, Ledger introduced direct access to Morpho’s lending infrastructure through its wallet application. The integration allows users to interact with lending markets and curated vaults across Ethereum and supported layer-two networks without requiring a separate browser-wallet extension. Morpho reported approximately $16.94 billion in deposits and $5.63 billion in outstanding loans on October 7, reflecting the scale of the lending infrastructure underlying the new service.The companies previously collaborated on stablecoin yield products, making Crypto Loan another step in their relationship. Ledger is entering an increasingly competitive market for cryptocurrency-backed borrowing. Coinbase already offers Bitcoin-backed lending through Morpho, while traditional financial institutions have also explored cryptocurrency collateral arrangements. The broader commercial opportunity involves allowing long-term holders to obtain liquidity without immediately selling appreciated assets. For borrowers, however, avoiding a sale does not eliminate financial risk. Interest expenses, collateral liquidation, wrapped-token exposure and smart-contract vulnerabilities remain important considerations. Ledger’s launch therefore represents a shift in how hardware-wallet users can access decentralized finance, rather than the introduction of a conventional bank loan secured by native Bitcoin. The distinguishing feature is the combination of onchain borrowing, integrated position management and hardware-based transaction authorization within a single application.