Ledger Adds Morpho Loans Against Wrapped Bitcoin

Ledger is rolling out Crypto Loan in its Ledger Wallet app, letting eligible users borrow stablecoins against wrapped Bitcoin through Morpho, with Yield.xyz providing the integration. The company said the feature is “rolling out now” in an Oct. 21 announcement.

According to Ledger’s borrowing guide, the launch supports four Ethereum pairings: cbBTC or WBTC collateral, each usable to borrow either USDC or USDT. The interface works on desktop and mobile; these are loans against wrapped tokens, not native BTC deposited directly from the Bitcoin network.

The change puts borrowing and position management inside the wallet app rather than a separate DeFi dashboard. But keeping signing keys on a hardware device does not leave pledged tokens freely spendable: collateral moves into Morpho smart contracts and can be liquidated if the loan becomes unhealthy.

The feature was outlined in Ledger’s Oct. 7 release notes. It extends an existing relationship with Morpho: the lending protocol says Crypto Loan follows Stablecoin Earn, launched last year, and that stablecoins supplied through Earn contribute liquidity borrowers can draw on.

Borrowers deposit wrapped Bitcoin into Morpho’s isolated lending markets. Those contracts handle collateral, interest and position accounting; Yield.xyz connects the lending infrastructure to Ledger’s interface. Ledger describes itself as a technology provider, rather than the lender.

Hardware Signing Does Not Prevent Liquidation

Users choose their collateral and borrowing pair, enter amounts and select a loan-to-value ratio—the debt relative to collateral value. Ledger says approvals, collateral deposits, borrowing, repayment and withdrawals are displayed in human-readable form on the hardware signer before users approve them. The app also lets borrowers monitor their position, add collateral and repay.

The loans carry variable interest rates determined by utilization of the underlying markets. Under Morpho’s market rules, each market has its own fixed parameters, including its collateral token, loan token, price oracle and liquidation loan-to-value threshold.

When a position’s LTV exceeds that threshold, Morpho permits external liquidators to repay part or all of the debt in exchange for collateral plus a liquidation bonus. Falling collateral prices or interest accumulating on the debt can make a position eligible. Hardware signing protects the user’s authorization process; it does not override those contract rules.

Wrapped Bitcoin also adds a custody dependency beyond the loan itself. Ledger’s guide notes that wrapping introduces a custodian and a conversion step, while warning that smart-contract bugs and oracle failures can affect collateral.

Availability varies by region. Ledger directs users to check their eligibility inside the app.