APX Lending Rolls Out Five-Year Bitcoin and Ethereum-Backed Revolving Credit Line

APX Lending, Canada's first regulated digital-asset-backed lender, has launched a five-year revolving line of credit that allows clients to borrow against Bitcoin, Ethereum, or a combination of both, the company announced on September 3. The new facility comes with no origination, prepayment, or liquidation fees and includes collateral insurance coverage of up to $250 million.

How the Line of Credit Works

A key distinction from APX's fixed-term loans—which are collateralized by either BTC or ETH—is that the new facility can combine both assets when calculating borrowing capacity. For example, a client holding $200,000 of Bitcoin and $100,000 of Ethereum can apply the combined $300,000 toward a single credit line; at 60% loan-to-value, this supports borrowing capacity of up to $180,000.

Annual interest rates range from 10.49% to 11.99% depending on the outstanding balance, and interest accrues only on the amount drawn, meaning borrowers pay nothing on unused capacity. That draw-only interest structure mirrors how unsecured personal lines of credit work at traditional banks, in contrast to fixed-term crypto loans where interest typically applies to the full borrowed amount for the entire term.

The revolving structure allows clients to set up the facility once and then draw, repay, and redraw funds as their needs change, rather than initiating a new loan each time. Available credit adjusts dynamically with the market value of the collateral, expanding or contracting as the pledged Bitcoin and Ethereum appreciate or depreciate. That dynamic adjustment cuts both ways: a decline in crypto prices can reduce available credit and, in volatile markets, potentially trigger margin calls or liquidation events—a risk that has historically affected crypto-backed borrowers during sharp drawdowns. APX says its facility carries no liquidation fees, though the collateral itself remains exposed to market moves.

A Regulated Lending Framework

APX was the first digital-asset-backed lender approved by Canadian securities regulators and is registered with both FINTRAC and FinCEN. Founded in 2023 and headquartered in Toronto, the company's operations now span fixed-term lending, revolving credit, and a Lending-as-a-Service platform enabling banks and fintechs to offer APX-powered products to their own clients.

"A revolving line of credit is something our clients have asked us for repeatedly," said founder and chief executive Andrei Poliakov. "You may need money for a purchase today, an investment three months from now and a business expense later in the year. You shouldn't have to start a new loan every time."

Crypto-Backed Credit Broadens

The launch comes amid a widening market for crypto-backed borrowing. Ledn recently projected that the Bitcoin-backed loan market could reach $1 trillion over the next decade, while banks have begun accepting digital assets as collateral, with Sberbank planning to lend against Bitcoin, Ethereum, and USDT. Crypto-backed credit products let holders access liquidity without selling their assets, a key appeal for long-term holders—though pricing remains a differentiator: rates on APX's facility start at 10.49%, well above typical secured lending rates in traditional finance, reflecting the volatility of the underlying collateral.

APX's move signals that regulated lenders are moving beyond single-transaction loans toward products that mirror traditional banking lines of credit, even as borrowing capacity remains tied to the market value of the pledged crypto.

Source: CryptoNews.net