Does Ledger take custody of the Bitcoin used as collateral?

No. The collateral is wrapped BTC held in Morpho smart contracts, and every action requires physical approval on the Ledger device. Private keys never leave the hardware.

What can users borrow against their Bitcoin?

Stablecoins, typically USDC or USDT, drawn from Morpho's on-chain lending markets through the Ledger Live interface.

Where was the product announced?

At TOKEN2049 Singapore on Wednesday, October 7, 2026, per Decrypt's reporting.

Ledger Rolls Out Bitcoin-Backed Loans at TOKEN2049, Keeps Keys on the Device

Market impact

The immediate read is bullish for Morpho and for wrapped Bitcoin flows on Ethereum and L2s. Any meaningful uptake routes new BTC collateral into Morpho's markets, which lifts both deposits and borrow demand. Stablecoin issuers benefit on the margin too, since the borrowed asset is typically USDC or USDT.

The headline looks bullish. The flow picture is more nuanced. Wrapped BTC supply has been flat to declining for most of 2025 as holders preferred native BTC exposure through spot ETFs.

A credible borrow use case could reverse that trend, but only if rates stay competitive against the centralized alternatives still operating offshore. For Bitcoin itself, the second-order effect is reduced sell pressure: holders who need dollars but don't want to realize gains now have a cleaner path to liquidity. That's structurally supportive, though hard to size until Ledger discloses borrow volumes.

Ledger launched a Bitcoin-collateralized lending product on Wednesday at TOKEN2049 Singapore, letting hardware wallet users borrow stablecoins against wrapped BTC while private keys and transaction approval stay on the device. The feature, called Crypto Loan, routes through Morpho's on-chain lending markets and goes live inside Ledger Live. Decrypt first reported the rollout.

By Clara Hoffmann· AI-assisted· L2 & scaling

What happened

Ledger unveiled Crypto Loan on Wednesday at TOKEN2049 Singapore, a borrowing feature that lets holders put up wrapped Bitcoin as collateral and draw stablecoins against it, per Decrypt. The product sits inside Ledger Live, the company's desktop and mobile app, and plugs directly into Morpho, the on-chain lending protocol that has grown into one of the larger DeFi credit venues this cycle.

Crucially, Ledger isn't custodying the collateral. The wrapped BTC moves through smart contracts, but every signature, deposit, and repayment still requires physical approval on the user's Ledger device. That's the pitch: borrow against your coins without ever handing them to a lender's hot wallet.

For a company whose brand is built on 'not your keys, not your coins,' the design choice matters. Ledger is extending into DeFi, but on its own custody terms.

Why it matters

Centralized crypto lending collapsed in 2022. Celsius, BlockFi, Genesis - all gone, all after taking custody of user coins and lending them out opaquely. The surviving model is overcollateralized, on-chain, and auditable in real time.

Morpho has quietly become one of the main venues for that model, with its peer-to-peer matching layer sitting on top of established money markets. Ledger plugging retail hardware wallet users directly into that infrastructure is a distribution event. Millions of Ledger devices are in circulation.

Most owners sit on their coins because the only alternatives historically meant either selling or shipping BTC to a custodial lender. A one-click borrow flow against wrapped BTC, with keys that never leave the device, removes the two biggest friction points. It's also a tacit endorsement of DeFi credit rails from a company that spent years keeping its distance.

Market impact

Ledger Rolls Out Bitcoin-Backed Loans at TOKEN2049, Keeps Keys on the Device

What happened

Why it matters

Market impact

What to watch

Disclaimer

Key takeaways

Frequently asked

Sources