Cryptocurrency platform Backpack has expanded its services in Japan by launching a new lending and borrowing feature. This development will make Japan the first market where Backpack will offer crypto-backed loans at launch. This feature allows users to earn yield on their assets or borrow funds without selling their holdings. The company confirmed the update on December 22nd. The service supports major assets such as Bitcoin, Ether, Solana, XRP, and USDC. However, Backpack clarified that at this stage this feature does not include spot trading or permanent trading.
“Borrow and Lend” launches for Japanese users
This new product allows users to lend out supported crypto assets and earn variable returns. At the same time, you can use those assets as collateral to borrow funds such as USDC. This setup allows users to access liquidity while maintaining exposure to cryptocurrency positions. Backpack positioned this feature as a “use, don’t sell” option.
Backpack announced that it has launched the “Borrow/Lend” function for the first time in Japan, which allows users to earn variable income through loans without selling assets and borrow funds using BTC, ETH, SOL, XRP, USDC, etc. as collateral. This feature is also included in the Backpack Points point system. Backpack reminds you that lending businesses have liquidation risk and spot and contract trading are currently not covered. https://t.co/qpanQsvz35
— Wu Shuo Blockchain (@wublockchain12) December 22, 2025
This approach targets long-term holders who want flexibility without exiting the market. The platform also confirmed that “rent and borrow” activities will be eligible for the Backpack Points rewards program. Currently open to Japanese residents. Until now, Japanese users could not participate in the point system. This change marks a broader expansion of the backpack’s localized offerings in the country.
Explanation of automatic financing and withdrawal rules
The backpack uses an automatic lending model. Once the supported assets are deposited, they are immediately lent out on a seven-day loan basis. Interest will start accruing immediately. However, this structure has limitations. Assets under automatic financing cannot be withdrawn during the 7-day financing period. If the user adds more of the same asset, the loan term will be reset. As a result, the withdrawal lock will be extended from the most recent deposit time.
Withdrawal rules apply separately for each subaccount and asset type. Interest will continue to accrue unless your withdrawal request is put on hold. Estimated yields may vary depending on market conditions. Backpack emphasized that automatic financing is not optional. It is always active and requires no manual setup by the user.
Liquidation risk and scope limitations
While this feature provides new flexibility, Backpack warned users of the risks. Borrowing against virtual currencies involves liquidation risk. If asset prices decline sharply, the collateral may be sold to cover the loan. The platform urged users to fully understand how it works before renting. It also revealed that the current launch only covers borrowing and lending services. Spot trading and derivatives are not included in this development. This limitation suggests a gradual expansion strategy. Backpack seems to be focused on controlled product releases, especially in regulated markets like Japan.
Japan expansion suggests a broader strategy
Japan has the strictest cryptocurrency regulatory framework in Asia. Launching lending services there demonstrates confidence in Backpack’s compliance regime. This also reflects the growing demand for yield-based products among crypto users in Japan. By starting with Borrow and Lend, Backpack is carving out a segment that focuses on capital efficiency rather than speculation. More features may be added as regulatory clarity improves. For now, the message is clear. Users in Japan have new tools, but the risks remain, and Backpack is expanding step by step.
