As the Federal Reserve in the US begins cutting rates, many are asking, “Will Ledn’s lending rates follow suit?” It’s a fair question, given that all our loans are in US dollars, whether in fiat or stablecoins. However, Ledn’s lending rates are global, not tied to any single country’s central bank. Instead, our rates are driven by two main factors: borrowing demand and funding supply. Let’s break each down.
Borrowing Demand
Our clients borrow from Ledn for many reasons. Some use our B2X product to increase their Bitcoin holdings when they expect the price to rise. Others use our Bitcoin-backed loans (BBL) for personal needs—whether it’s paying for tuition, buying a car, or even going on vacation. What these clients are looking for is trust and reliability.
They want a lender who weathered the crypto crisis of 2022-23 and emerged stronger. They want a lender who never paused loans or withdrawals and didn’t lose a single satoshi of client assets during that challenging period. And they want a lender who offers competitive rates on loans backed by digital assets.
We’re proud to be the standout choice for clients seeking to borrow against their Bitcoin or Ether. While we may not always offer the absolute lowest rates, we invest heavily in security and expertise to ensure the safety of client assets and earn their trust every day.
Funding Supply
Every dollar we lend must be sourced, and we do this through several channels, including our stablecoin Growth Accounts and institutional funding partners. For example, last month we announced the industry’s first syndicated Bitcoin-backed loan—a $50 million facility with Sygnum Bank in Switzerland. This, along with other facilities, provides long-term financing to meet growing retail demand.
Our borrowing costs are tied to the Secured Overnight Financing Rate (SOFR) in the US, which is closely linked to the Federal Reserve’s rate. We use either the 1-month or 3-month SOFR as a reference in our funding agreements. This means when the Fed cuts rates, we won’t see an immediate reduction in our borrowing costs. Instead, there’s a 30- to 90-day lag. Once our borrowing rates decline, we can pass those savings on to our clients—but this won’t happen right after a Fed rate cut.
Transparency and Trust
At Ledn, transparency is central to everything we do. Through our Open Book Report and Proof of Reserves, we continue to offer clear insights into how we operate. We hope this explanation helps our clients better understand how interest rate changes impact their dealings with Ledn.
Regards,
John Glover, Chief Investment Officer at Ledn
