Key insights:
- Self-custody stays at the heart of the process because users must physically approve lending moves using their Ledger hardware devices.
- Morpho gets a way to reach users. Ledger is now bringing decentralized borrowing directly into its wallet. This opens up a channel for Morpho to grow.
- Bitcoin-backed borrowing is getting more competitive. Ledger, Coinbase and other platforms are all expanding their lending offerings.
Ledger has launched a self-lending feature. This lets eligible users borrow stablecoins by using wrapped Bitcoin as collateral. The company announced Crypto Loan, at TOKEN2049 Singapore on October 7. This moves the Ledger wallet beyond storing assets and signing transactions.
Users can now use cbBTC or wBTC to borrow USDC or USDT. The feature runs on Morpho’s lending markets. It uses Yield.xyz as the provider.. Users keep full control. They must approve every transaction using their Ledger hardware.
Bitcoin holders gain access to stablecoin liquidity
Ledger said Crypto Loan allows eligible customers to access liquidity without selling their Bitcoin-linked assets. The service also avoids sending collateral to a centralized lending platform, according to the company’s announcement.
Users can open loans check their loan-to-value ratios add collateral borrow additional funds and repay debt all within the Ledger Wallet. However, the borrowing rates change depending on what’s happening in the underlying lending markets.
The company also warns that borrowers could face liquidation if the value of their collateral drops quickly. That means users must keep collateral at all times as market conditions shift.
Before opening a loan eligible customers can try out borrowing options using a simulation tool. Once they decide key transactions need approval through a Ledger hardware device using its Clear Signing feature to confirm the action.
That process keeps final transaction authorization with the device holder. It also separates the wallet interface from the hardware signer that approves lending actions.
Morpho expands its role inside the wallet
Morpho provides the decentralized lending infrastructure behind Crypto Loan, while Yield.xyz supports transaction construction and position monitoring.
Ledger also announced direct access to Morpho for its hardware signers. The integration allows users to connect with the lending protocol without relying on browser extensions or separate software wallets. The company said the direct connection would become available to users on Oct. 7. Availability of crypto loan itself will expand gradually across eligible markets.
Morpho co-founder Paul Frambot said the service complements Ledger Earn, which also uses Morpho. He said stablecoins deposited through Earn could help fund loans taken by Bitcoin holders.
The arrangement creates a closer connection between lending and borrowing activity within the same wallet environment. It also gives Morpho another route to reach users through an established hardware wallet ecosystem.
Bitcoin lending competition continues to grow
The launch comes as major crypto companies expand lending products tied to Bitcoin. Coinbase has also used Morpho infrastructure for Bitcoin-backed borrowing through cbBTC.
Coinbase previously introduced fixed-rate cbBTC loans through Morpho Midnight on Base. Its variable-rate lending product had more than $1.4 billion in outstanding loans against roughly $3 billion in collateral at the time.
Meanwhile, Uniswap introduced Morpho-powered lending vaults through its Earn product in July. The service supports deposits involving USDC, USDT, and ETH on Ethereum.
Ledger’s entry therefore places another major crypto platform into a growing lending market. The approach differs from traditional finance because users can retain exposure to Bitcoin while accessing stablecoin liquidity.
But, there are major risks to collateralized borrowing. A sudden drop in the Bitcoin’s value can make the value of the collaterals less than required and if the loan reaches the threshold, it can lead to liquidation.
Ledger extends beyond hardware security
The lending launch marks a broader expansion of Ledger’s wallet strategy. The company has historically focused on hardware security, but its latest products increasingly connect users with decentralized financial services.
Ledger says its devices secure nearly 30% of Bitcoin held by retail investors. It also reports more than 8 million signers sold across more than 165 countries.
Alongside Crypto Loan, the company unveiled a limited-edition San Antonio Spurs Nano Gen5 device. The release includes 250 units priced at €199 each and extends a partnership between Ledger and the NBA team.
The Spurs edition will launch in Singapore, Paris, and selected parts of Texas. Ledger said licensing restrictions prevent sales elsewhere in the United States and Canada.
The hardware release adds a consumer-focused element to an announcement centered on financial services. More importantly, the lending rollout shows how wallet providers are moving deeper into onchain financial activity.
Conclusion
Ledger is making an expansion into Bitcoin-backed borrowing with two new partnerships with Morpho and Yield.xyz. Eligible users can stake their cbBTC or wBTC for USDC or USDT while keeping the control of all approvals in their hands with hardware devices.
The rollout also bolsters Morpho’s footprint on the leading crypto platforms. However, the same lending model leaves the borrower vulnerable to changing interest rates and risk of being liquidated when interest rates fall when the collateral price falls.
Leveraging stablecoins to get liquidity without having to sell their assets, Ledger will progressively increase access to Crypto Loan to more eligible users.
