Ledger began rolling out Crypto Loan on Oct. 7, letting eligible Ledger Wallet users borrow USDC or USDT against wrapped Bitcoin through Morpho rather than sell their holdings.

The feature brings four lending markets on Ethereum into Ledger's desktop and mobile app: WBTC or cbBTC as collateral, paired with either stablecoin. Morpho handles loan origination, matches borrowers with lenders, and enforces on-chain liquidation. Yield.xyz supplies the technical integration. Ledger itself neither lends nor custodies the assets.

What does the product do?

Crypto Loan extends Ledger's consumer app into on-chain credit, letting self-custody holders monetize BTC exposure without leaving the wallet environment. Morpho smart contracts govern the flow, with each step surfaced on the Ledger device before signing.

"Every step Clear Signed on your Ledger signer," Ledger wrote in its launch announcement. Its borrowing guide adds that users review transactions in plain language on the device before approving them, mirroring the trust display applied to spot trades and swaps.

How are loans priced and liquidated?

Ledger sets the default loan-to-value ratio—the debt relative to the value of the collateral—at 50%, adjustable by users. Its help page lists an 86% liquidation threshold across the four markets.

Borrowing carries a fee of 1% of the loan amount, separate from network and protocol costs. Interest rates are variable, set by utilization in each underlying Morpho pool. The app surfaces the prevailing rate and required collateral during the simulation step.

Under Morpho's rules, once a position's LTV exceeds the market threshold, any external liquidator can repay part or all of the debt in exchange for collateral plus a bonus. That process bypasses further approval from the borrower's Ledger device. Falling collateral prices and accrued interest can both push a loan past the limit.

Borrowers lower LTV by adding collateral or repaying debt before liquidation. Full repayment lets users withdraw any remaining pledged tokens.

What custody model applies?

Private keys remain on the Ledger device. Pledged tokens move into a Morpho smart contract and fall under its liquidation logic.

The split means users retain signing sovereignty across the loan lifecycle while handing operational custody of the borrowed-against assets to the protocol until repayment. Ledger does not intermediate beyond routing transactions.

What are the residual risks?

Collateral comes in the form of wrapped tokens, not native Bitcoin. WBTC and cbBTC are BTC-backed ERC-20s, so borrowers also depend on a wrapping custodian, Morpho's smart contracts, and the price oracles that feed them. Offline key storage does not remove those dependencies.

Crypto Loan's availability varies by region. Ledger directs users to confirm eligibility inside the app, and the rollout excludes jurisdictions where local rules block the integration.

How does this fit Ledger's broader roadmap?

The feature extends Ledger's Stablecoin Earn product, launched in 2025. Morpho says stablecoins supplied through Earn help fund Crypto Loan borrowers, linking the two services inside a single protocol.

The closer integration of Morpho with two of crypto's largest consumer surfaces—Coinbase from January 2025 and Ledger now—signals a structural shift in on-chain Bitcoin lending. Competition for retail BTC collateral will increasingly play out on protocol liquidity and liquidation engineering rather than branding, and Morpho's expanding distribution channel tests how legacy lenders absorb that pressure.