Backpack Expands to Japan with New Crypto Lending Feature

Crypto platform Backpack has expanded its services in Japan with the launch of a new lending and borrowing feature. The launch makes Japan the first market where Backpack offers cryptocurrency-backed loans at launch. The feature allows users to earn returns on assets or borrow funds without selling their holdings. The company confirmed the update on December 22. The service supports major assets including Bitcoin, Ether, Solana, XRP, and USDC. However, Backpack clarified that the feature does not include spot or perpetual trading at this stage.

Borrow and Lend is available for Japanese users

With the new product, users can lend compatible cryptoassets for variable returns. At the same time, they can use those assets as collateral to borrow funds, such as USDC. This setup allows users to access liquidity while maintaining exposure to their crypto positions. Backpack positioned the feature as a “use without selling” option.

This approach is aimed at long-term holders who want flexibility without exiting the market. The platform also confirmed that the Borrow and Lend activity is eligible for its Backpack Points rewards program. Which is now open to Japanese residents. Until now, Japanese users could not participate in the points system. This change marks a broader expansion of Backpack’s localized offerings in the country.

Automatic loan and withdrawal rules explained

Backpack uses an automatic lending model. Once a backed asset is deposited, it is immediately lent out under a seven-day loan. Interest starts accruing immediately. However, this structure has restrictions. Auto loan assets cannot be withdrawn during the seven-day loan period. If a user adds more of the same asset, the loan term resets. As a result, the withdrawal block is extended from the last moment of deposit.

Withdrawal rules apply separately for each subaccount and asset type. Interest continues to accrue unless there is a pending withdrawal request. Estimated returns may change depending on market conditions. Backpack emphasized that the car loan is not optional. It is always active and does not require manual configuration by users.

Liquidation risk and scope limitations

While the feature offers new flexibility, Backpack warned users about the risks. Loans against cryptocurrencies carry liquidation risk. If asset prices fall sharply, collateral can be sold to cover the loan. The platform urged users to fully understand the mechanism before borrowing. He also clarified that the current launch only covers lending and borrowing services. Spot trading and derivatives are not included in this release. This limitation suggests a gradual expansion strategy. Backpack appears to focus on controlled product launches, especially in regulated markets like Japan.

Japan’s expansion signals broader strategy

Japan has one of the strictest crypto regulatory frameworks in Asia. Launching lending services there indicates confidence in Backpack’s compliance setup. It also reflects the growing demand for performance-based products among Japanese cryptocurrency users. By starting Borrow and Lend, Backpack is tapping into a segment focused on capital efficiency rather than speculation. As regulatory clarity improves, more features may follow. Today, the message is clear. Japanese users get new tools, but risks remain and Backpack is taking its expansion step by step.

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