Ledger is giving Bitcoin holders a way to tap liquidity without parting with their coins. The hardware wallet maker has launched Crypto Loan, a self-custodial lending feature inside its wallet app that lets eligible users pledge wrapped Bitcoin as collateral to borrow stablecoins, with final approval kept on the user's hardware device at all times.

Unveiled Wednesday at TOKEN2049, a major annual crypto industry conference held this year in Singapore, the new feature allows eligible users to post wrapped Bitcoin—in the form of cbBTC or wBTC, tokenized versions of Bitcoin that circulate on smart-contract-enabled blockchains—as collateral to borrow the dollar-pegged stablecoins USDC or USDT. Because Bitcoin's base network does not interact directly with decentralized finance protocols, wrapped versions of the asset are what make it usable as onchain collateral. The pitch is access to liquidity without moving funds onto a centralized lending platform or selling the underlying asset.

Users can open and manage loans directly in Ledger Wallet, tracking their loan-to-value ratio—the proportion of the loan relative to the collateral's value, which climbs when collateral prices fall—adding collateral, repaying debt, or borrowing additional funds. Key actions are physically approved on a Ledger signer before they execute.

The lending feature is powered by Morpho, the decentralized credit network that settles lending through automated smart contracts, through technical provider Yield.xyz—the same provider Coinbase relies on for its own Bitcoin-backed loans.

Ledger separately announced direct access for its signers to Morpho, letting users connect their hardware devices to the protocol without routing through browser extensions or software wallets. The integration pairs with the Crypto Loan rollout, which likewise runs on the decentralized credit network.

Morpho co-founder Paul Frambot said the integration creates "a powerful liquidity flywheel," with stablecoins deposited through Ledger's existing Earn product able to fund the very loans that Bitcoin holders now take out.

The move pushes Ledger, best known for its hardware wallets, deeper into financial services and lands it in a fast-growing corner of the crypto industry. Coinbase recently rolled out fixed-rate Bitcoin-backed loans after expanding the product to U.K. users, while JPMorgan has explored lending against Bitcoin and Ethereum. The self-custodial design stands in contrast to the centralized lenders that defined a previous market cycle: Celsius and BlockFi, once among the largest crypto lending platforms, froze customer withdrawals and collapsed in 2022, leaving users unable to reach funds pledged on their platforms.

The appeal is consistent across these offerings: holders who expect their crypto to appreciate can borrow against it rather than trigger a taxable sale. The risk is equally familiar, since a sharp price drop can push the loan-to-value ratio toward the threshold at which the protocol liquidates the collateral.

Ledger, which says it secures nearly 30% of all Bitcoin held by retail investors, also used its Singapore stage to unveil a limited-edition Nano Gen5 signer made with the NBA San Antonio Spurs—a 250-unit run that extends a marketing deal with the team announced last year.

Crypto Loan begins rolling out to eligible users immediately, with availability set to expand over time.