Lede
Nexo, a prominent crypto financial services organization established in 2018, has officially launched a new specialized lending product designed for holders of major digital assets. Titled “Zero-interest Credit,” the product allows users who hold Bitcoin (BTC) and Ether (ETH) to borrow against their holdings through fixed-term loan agreements. According to the company’s formal announcement, these loans provide a zero-interest structure, which is a significant departure from traditional interest-bearing credit models in the digital asset space. The terms for these loans are defined in advance, providing borrowers with a clear framework for repayment conditions before they commit to the transaction.
The operational mechanics of Zero-interest Credit involve settling the loans at maturity. One of the key features of this product is the flexibility regarding repayment; borrowers have the option to settle their debts using either stablecoins or the underlying collateral, depending on the specific market conditions at the time the loan reaches its term. This flexibility is intended to give users more control over how they manage their liquidity and asset exposure. Nexo has also integrated terms that prevent the liquidation of assets before the maturity date, while clearly defining the repayment range for the borrower.
Before this public launch, Nexo had already been facilitating a similar structured lending model through its private and over-the-counter (OTC) channels. The company reported that it facilitated more than $140 million in borrowing via these channels throughout 2025. This established track record provided the foundation for the current product release. Nexo continues to offer a broad array of crypto-backed loans, trading, and savings services to a global client base that extends across 150 different jurisdictions, maintaining its role as a centralized financial hub within the blockchain industry.
Context
The evolution of the crypto lending sector has been marked by significant shifts in both structure and sentiment since the industry-wide crises of 2022. During that year, the market experienced severe distress, with companies such as Celsius and BlockFi being widely criticized for their roles in amplifying market contagion. These firms were heavily involved in the events that deepened the fallout from the FTX exchange collapse, leading to a period of contraction and intense regulatory scrutiny. Since that time, the industry has worked to transition toward more conservative lending practices, focusing on fully collateralized structures to mitigate the risks associated with market volatility.
In 2025, the centralized lending market showed signs of renewed vigor as several major players expanded their service suites. Nexo was joined by other centralized lenders, including Ledn, Xapo Bank, and Coinbase, all of whom introduced or broadened their crypto lending offerings during the year. These expansions suggest a growing institutional and retail appetite for credit products that allow users to leverage their digital assets without selling them. The move toward zero-interest models and fixed-term agreements reflects an ongoing attempt by these companies to provide more predictable financial tools for their users.
Parallel to the growth of centralized platforms, the development of Bitcoin-native lending has also gained momentum. A notable example of this trend is the project Babylon, which received $15 million in funding from a16z Crypto. This investment was specifically aimed at expanding the capabilities of lending protocols that operate directly on the Bitcoin network. The focus on Bitcoin-native solutions, combined with the expansion of established centralized lenders, illustrates a dual-track approach to credit in the modern crypto economy, where both decentralized protocols and centralized institutions are competing to provide liquidity to a maturing market.
Impact
The impact of renewed interest in digital asset lending is clearly reflected in the growth of decentralized finance (DeFi) protocols throughout 2025. According to data provided by DefiLlama, the total value locked (TVL) in DeFi lending products began the year at approximately $48.15 billion on January 1. This figure saw a steady climb throughout the first three quarters of the year, eventually reaching a peak of $91.98 billion on October 7, 2025. This nearly twofold increase in TVL underscores the massive scale of capital being utilized within decentralized credit markets and the high level of participation from global users.
While the market experienced some downward trending following a significant crypto liquidation event on October 10, activity began to stabilize by November. Currently, the total value locked in the DeFi lending sector stands at approximately $66 billion. This current valuation demonstrates that despite periodic market corrections, the underlying demand for decentralized lending remains robust. The stability of the TVL at these levels suggests that users are continuing to utilize these protocols for managing their digital asset portfolios even during periods of price uncertainty.
The DeFi lending landscape remains dominated by a few key protocols that manage the majority of the market’s liquidity. Aave currently leads the sector with more than $22 billion in outstanding loans. These loans are supported by a substantial base of over $55 billion in deposited assets, maintaining a high collateralization ratio that is characteristic of the protocol’s risk management strategy. Morpho ranks as the second-largest protocol in this category, supporting roughly $3.6 billion in outstanding loans. These positions are backed by about $10 billion in supplied liquidity. The continued dominance of these platforms highlights the concentration of trust and capital in established protocols that have successfully navigated the market’s evolving regulatory and economic environment.
Outlook
Looking toward the future, the strategic direction of major lenders like Nexo indicates a focus on geographical expansion and regulatory alignment. Nexo has officially stated its intention to reenter the United States market, a move that follows its withdrawal in late 2022. The company’s previous exit was part of a broader retreat from the US during a period of intense regulatory uncertainty. This process included a settlement with the Securities and Exchange Commission (SEC) in early 2023, where Nexo agreed to pay $45 million to resolve allegations. The planned reentry suggests that the firm has adapted its operational model to meet the specific legal requirements of the US jurisdiction.
The broader crypto lending industry is entering a phase characterized by more structured and conservative product offerings. The expansion of centralized lending services by firms like Nexo, Ledn, and Coinbase in 2025 suggests that the market is moving away from the high-risk practices that led to the failures of 2022. By offering products such as Zero-interest Credit, lenders are attempting to attract a more risk-averse user base that prioritizes predictability and fixed terms. This trend is likely to continue as platforms compete to offer the most competitive and secure lending environments for Bitcoin and Ether holders.
Furthermore, the stabilization of total value locked in DeFi protocols at the $66 billion mark provides a solid foundation for future growth in decentralized lending. As institutional interest in Bitcoin-native lending grows, as evidenced by investments in projects like Babylon, the boundaries between centralized and decentralized lending may continue to blur. The ongoing development of new credit models and the reentry of major players into key markets point toward a more integrated and resilient financial ecosystem. As these markets mature, the focus will likely remain on enhancing transparency and providing sustainable financial services to users across the 150 jurisdictions where these companies currently operate.
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