Ledger Launches Self-Custodial Bitcoin Loans via Morpho

Hardware wallet manufacturer Ledger has launched Crypto Loan, a self-custodial feature within its wallet application that enables eligible users to pledge wrapped Bitcoin as collateral to borrow USDC or USDT, according to Decrypt.

Unveiled at the TOKEN2049 conference in Singapore, the feature allows holders of cbBTC or wBTC to access liquidity without moving funds to a centralized lending platform or selling their underlying assets. Users can manage loans directly in the Ledger Wallet interface, monitor their loan-to-value ratios, and execute actions that require physical approval on a Ledger hardware device.

Technical Integration

The feature is powered by the decentralized credit network Morpho through technical provider Yield.xyz. Alongside the loan feature, Ledger introduced a direct-access integration enabling its signers to connect directly to Morpho without routing through browser extensions or software wallets. Morpho co-founder Paul Frambot noted that the setup creates a liquidity flywheel, where stablecoins deposited through Ledger's existing Earn product can fund loans taken out by Bitcoin holders.

Market Context

The launch places Ledger alongside other financial service offerings from firms such as Coinbase and JPMorgan, which have explored Bitcoin-backed lending products. Ledger states that it secures nearly 30% of all Bitcoin held by retail investors. During the conference, the company also showcased a limited-edition Nano Gen5 signer produced in collaboration with the San Antonio Spurs.

Key facts

• Ledger launched Crypto Loan, allowing users to borrow USDC or USDT against cbBTC or wBTC.
• The feature is powered by Morpho via Yield.xyz and is integrated directly into the Ledger Wallet app.
• Loan actions require physical approval on a Ledger hardware signer.
• Ledger announced direct device access to the Morpho protocol without browser extensions.