Cryptocurrency lending is making a comeback in Canada, with Toronto-based APX Lending raising $20 million to meet the increasing demand for crypto-backed loans. The funding, including an accordion facility provided by Cypress Hills, gives APX the flexibility to rapidly scale operations. APX Lending, founded in early 2023 by the team behind Coinberry, offers crypto holders the ability to borrow stablecoins and digital assets using Bitcoin and Ethereum as collateral. Funds are securely stored in segregated cold-storage wallets with BitGo, and transactions are protected by Fireblocks, offering substantial insurance coverage.
While APX Lending operates within the Centralized Finance (CeFi) domain, with full visibility of loan collateral on the blockchain, it does not rely on automated smart contracts like decentralized finance (DeFi) platforms. The funding round comes at a time when Bitcoin prices are rising, renewing interest in crypto-backed borrowing among long-term holders seeking to access liquidity without selling their assets. The Canadian lending market is also poised for significant growth, with projections indicating a potential surge to USD 3.42 billion by 2030, driven by a growing number of Canadians borrowing through crypto trading platforms.
The history of crypto lending has been turbulent, marked by platform collapses and regulatory challenges. However, the recent funding for APX Lending signals a shift towards optimism in the digital asset lending market, reflecting the changing regulatory landscape and increasing institutional interest in alternative collateralized finance. The total value locked in crypto lending protocols has been steadily rising, with leading platforms like Aave and MakerDAO experiencing an uptick in lending volumes. This suggests a positive outlook for the sector, with potential for further growth and competition among bitcoin-backed loan providers.
Mauricio Di Bartolomeo, co-founder of Toronto-based digital asset loan protocol Ledn, predicts a rise in bitcoin-backed loans as interest rates become more competitive with traditional financing options. The growing popularity of crypto lending protocols, including APX Lending, indicates a shift towards a more stable and regulated environment for digital asset loans. As the market matures and regulatory frameworks evolve, investors and borrowers are likely to see increased opportunities and lower barriers to entry in the crypto lending space. However, it is important to conduct thorough market research and exercise caution before investing in cryptocurrencies to mitigate the risk of financial loss in this volatile market.
