Ledger Launches Self-Custodial Bitcoin Lending Feature

Ledger unveiled Crypto Loan, a self-custodial lending feature integrated into its wallet app that lets eligible users pledge wrapped Bitcoin as collateral to borrow USDC or USDT stablecoins. The feature, powered by decentralized credit network Morpho and technical provider Yield.xyz, was announced Wednesday at the TOKEN2049 conference in Singapore.

The product marks Ledger’s expansion beyond hardware wallet security into financial services. Users can open, manage, and track loans directly within Ledger Wallet, with final approval on all key actions physically confirmed on a Ledger signer before execution. Borrowers can add collateral, repay debt, or increase loan amounts without leaving the app.

How the Feature Works

Crypto Loan accepts wrapped Bitcoin in two forms: cbBTC or wBTC. Users pledge these assets as collateral and receive USDC or USDT in return. Stablecoins deposited through Ledger’s existing Earn product can fund loans taken by Bitcoin holders, creating what Morpho co-founder Paul Frambot called “a powerful liquidity flywheel.”

Ledger announced direct access for its signers to Morpho, allowing connection without browser extensions or software wallets. This integration reduces friction for users moving between custody and lending.

The rollout begins immediately for eligible users, with availability expanding over time. Ledger did not specify which users qualify or provide details on loan terms, interest rates, loan duration, minimum or maximum borrow amounts, or liquidation thresholds.

Market Context

Ledger holds nearly 30% of all Bitcoin owned by retail investors, positioning the company as a significant player in self-custodial finance. The move places Ledger in direct competition with Coinbase, which recently rolled out fixed-rate Bitcoin-backed loans and expanded the product to U.K. users. JPMorgan has also explored lending against Bitcoin and Ethereum.

Crypto Loan carries collateral risk. A sharp price drop in Bitcoin can force liquidation of pledged assets, potentially converting gains into losses for borrowers.