Ledn Plans US Expansion Amid Growing TradFi Interest

Ledn, a prominent crypto lender with operations in over 130 countries, is planning to expand its services within the United States, with a particular focus on securing approvals on the West Coast. This move comes as traditional financial institutions (TradFi) are increasingly showing interest in the crypto space, potentially leading to significant shifts in the market.

Ledn's co-founder and CEO, Adam Reeds, revealed that the company has submitted an application to the state of California. Reeds noted that as the price of Bitcoin rises and more people own it, the compliance costs associated with expanding into new regions become more justifiable. Ledn, established in 2018, has managed to remain one of the largest centralized crypto lenders following a series of high-profile collapses in the sector in 2022.

According to a report, Ledn, along with Galaxy Digital and stablecoin issuer Tether, accounted for 90% of the $11.2 billion in outstanding loans as of the end of last year. Although this figure is significantly lower than the $34.8 billion peak seen in 2022, which was driven by now-defunct firms like BlockFi and Genesis, the entry of financial giants like Cantor Fitzgerald into the Bitcoin financing space suggests that the market could soon experience substantial changes.

Reeds highlighted that 90% of Ledn's business involves lending U.S. dollars to individuals who do not want to sell their Bitcoin. These loans can be as small as $500. The entry of firms like Cantor Fitzgerald is expected to open up more funding sources, thereby lowering Ledn's cost of capital and enabling the firm to deliver services at a better cost for individuals. Reeds also noted that as institutions enter the space, the focus will shift from pioneering efforts to boardroom discussions about missing out on opportunities, leading to increased competition and innovation.

Ledn currently operates in 39 states across the U.S., with California and Tennessee being among the largest by population. The firm aims to eventually become licensed in all 50 states. A significant portion of the $1.5 billion in assets on Ledn's platform is tied to the Global South, where the overall amount of assets has increased by 140% over the past year. Ledn has gained traction in countries with poor property rights, allowing users to access capital on a level playing field when pledging assets like land may not be feasible.

Reeds emphasized that in many countries, traditional lending is often limited to the wealthy, and Ledn's services help to level the playing field for those who may not have access to traditional financial services. The emergence of institutions like Cantor Fitzgerald is seen as a positive development, as it is expected to lead to lower fees and increased liquidity, making loans cheaper and more accessible. This increased competition and transparency in the crypto lending space are expected to drive further growth and innovation.