HashKey and Cross River Bank Expand Crypto Lending Services

HashKey Group is seeking to borrow between US$64 million and US$128 million to fund the launch of services allowing customers to borrow against their digital asset holdings [1]. The move marks a significant push by institutional players to integrate cryptocurrency into traditional lending frameworks, coinciding with Cross River Bank’s commitment to purchase up to US$250 million in crypto-collateralized loans originated by Figure Technology Solutions [2].

Institutional push into crypto-backed debt

HashKey’s proposed borrowing, which would make it the first Asian crypto firm to tap the loan market, is intended to diversify funding channels beyond equity [1]. The company, which recently reported an eightfold increase in cash and cash equivalents to HK$2.8 billion over the past year, aims to offer direct cash lending against crypto collateral or act as an intermediary between banks and borrowers [1]. While Bitcoin has retreated from an October 2025 peak above US$120,000 to approximately US$80,000, HashKey’s platform assets grew 60% in 2025 to HK$18.4 billion [1].

In the United States, the partnership between Cross River Bank and Figure Technology Solutions aims to provide liquidity to digital asset holders without requiring them to liquidate their holdings during market volatility [2]. Figure, which has facilitated over US$25 billion in home equity originations, is leveraging its blockchain-native ecosystem to scale this lending category [2]. These initiatives arrive as regulators, including Hong Kong’s Securities and Futures Commission, begin to clarify frameworks for margin financing and virtual asset services [1].

Regulatory and structural hurdles

Despite the expansion, significant barriers remain for broader bank participation. Under the Basel framework, virtual assets carry a punitive risk weighting of 1,250%, compared to 100% for standard corporate or real estate assets [1]. This regulatory treatment discourages many traditional lenders from entering the space until further clarity is provided on fintech and stablecoin oversight [1].

Bankers remain divided on the sector; some institutions are open to lending if proceeds are deployed into transparent margin-lending models, while others remain cautious due to the lack of consensus on whether crypto firms should be treated as traditional financial institutions [1]. HashKey expects to charge annual interest rates of 6% to 8% on its lending products, positioning them in line with rates currently offered by Hong Kong online brokerages [1].

What to watch

• Regulatory Risk Weighting: Monitor progress on Hong Kong’s licensing regime, which aims to allow well-regulated tokenized assets to qualify for lower capital requirements [1].
• Lending Model Adoption: Observe whether institutional interest in crypto-backed loans shifts from niche pilot programs to broader, bank-syndicated facilities [1].
• Collateral Performance: Track the impact of Bitcoin price fluctuations on the health of existing collateralized loan books as firms like Figure and HashKey scale their offerings [1, 2].

The success of these lending programs hinges on whether crypto firms can satisfy the transparency requirements of traditional banks while navigating a regulatory environment that still views digital assets as high-risk [1]. Whether these loans become a standard financing tool or remain a specialized niche depends on the evolution of risk-weighting standards and the stability of the underlying crypto collateral [1, 2].