Introduction

Crypto adoption in Australia is climbing, with more than 30% of adults now owning digital assets. As crypto prices have surged, many Australians are turning to crypto-backed loans to unlock cash without selling their holdings. Whether it’s for property, business growth, or simply liquidity, knowing the best loan providers is key.

Today, Australians have access to both local and international platforms offering competitive rates and flexible terms. From centralized lenders to DeFi protocols, borrowers can choose solutions that match their needs and risk appetite.

Understanding Crypto Loans in Australia

What Are Crypto Loans?

A crypto loan lets you borrow funds using your crypto as collateral. Think of it like a mortgage: you put up Bitcoin, Ethereum, or another asset as security for the loan. You still keep ownership of your crypto, which means you benefit if its value goes up.

Most loans are over-collateralized which means you’ll need to lock up more crypto than the amount you borrow. Loan-to-value (LTV) ratios usually sit between 50% and 90%, depending on the platform and asset.

CeFi vs DeFi Options

Centralized Finance (CeFi):

These platforms work like banks. They hold your collateral and handle the process for you. Key benefits include:

• Easy-to-use apps

• Customer support

• Fixed interest rates

• Links to traditional banking

• Regulatory oversight

Decentralized Finance (DeFi)

DeFi relies on smart contracts instead of intermediaries. Advantages include:

• You keep control of your private keys

• Transparent, code-driven lending

• Lower costs and global access

Learn more about CeFi vs DeFi: https://archlending.com/blog/cefi-vs-defi

Why Crypto Loans Appeal to Australians

• No capital gains tax event: Borrowing doesn’t trigger tax like selling your crypto would.

• No credit checks: Approval depends on your collateral, not your credit score.

• Fast access: Some lenders offer same-day funding.

Regulation of Crypto Loans in Australia

Current Rules

Crypto is fully legal in Australia. Oversight mainly comes from AUSTRAC (anti-money laundering compliance) and ASIC (securities regulation). Any exchange or loan provider must register with AUSTRAC and meet AML/CTF standards.

What’s Changing

From 2025, new rules will require crypto platforms with more than $10 million in transactions or $5,000 per customer to hold an Australian Financial Services Licence (AFSL). This will bring crypto lending closer in line with traditional finance, giving users stronger protections without shutting the door on innovation.

Top Crypto Loan Providers for Australians

Leading Platforms for Security and Trust

Arch Lending

Arch Lending is a leader in crypto lending market with its focus on security and institutional-grade service. As a centralized lender, Arch secures all crypto holdings with Anchorage, one of the world's most trusted digital asset custodians, ensuring customer collateral remains safely in storage throughout the loan period.

Key Features:

• Premium security with Anchorage custody solutions

• White-glove service for high-net-worth individuals

• Low rates

• Transparent fee structure and professional customer service

• Focus on risk management and asset protection

• Established reputation in retail and institutional lending

Arch Lending's commitment to security makes it the preferred choice for borrowers prioritizing asset safety and professional service over cost considerations.

Block Earner

Block Earner operates as Australia's prominent crypto-backed loan provider, offering AUD loans up to $5 million using Bitcoin, Ethereum, USDC, or USDT as collateral. With interest rates starting at 9.50% per annum and a comparison rate of 11.93%, the platform provides competitive terms for Australian borrowers.

Key Features:

• Fixed interest rates for up to 5 years

• No lock-in periods or early repayment fees

• 24-hour approval and funding process

• In-app loan management and LVR tracking

• AUSTRAC registered with local customer support

Block Earner is also starting Bitcoin-backed home deposit loans, allowing Australians to borrow up to 50% of a property's value using BTC as collateral.

Matias Group

Matias Group specializes in commercial crypto lending, particularly for property developers and entrepreneurs. The company leverages extensive knowledge of blockchain technology and maintains relationships with both Australian and international lenders.

Key Features:

• Focus on commercial and property development loans

• Cold storage security options

• 24-hour approval process

• Expertise in high-value transactions

• Tailored lending solutions for businesses

Aave (DeFi)

Aave functions as one of the most trusted DeFi protocols globally, operating through liquidity pools where lenders provide assets via smart contracts. The platform offers wrapped BTC and various other crypto assets for borrowing.

Key Features:

• Decentralized, trustless lending

• Flash loans for advanced users

• Multiple blockchain support (Ethereum, Polygon, Avalanche)

• Competitive interest rates

• No intermediary custody of funds

Compound (DeFi)

Compound operates as an Ethereum-based DeFi protocol allowing users to borrow assets and earn interest on deposits. Despite being considered more complex to use, it remains one of the most trusted names in the DeFi ecosystem.

Key Features:

• No minimum loan requirements

• Algorithmic interest rate determination

• Established reputation in DeFi

• Low borrowing rates for stablecoins

• Transparent, auditable smart contracts

Key Factors When Choosing a Crypto Loan Provider

Financial Terms and Conditions

Loan-to-Value Ratios LTV ratios determine how much you can borrow relative to your collateral value. Higher ratios mean more borrowing power but increased liquidation risk. Most platforms offer ratios between 50% and 80%, with conservative borrowers typically choosing lower ratios for safety.

Interest Rates and Fees Compare annual percentage rates (APR) across platforms, but don't forget to account for additional fees like origination costs, withdrawal fees, and penalty charges. Some platforms offer fixed rates while others use variable pricing based on market conditions.

Repayment Flexibility Look for platforms offering flexible repayment terms, including interest-only periods, early repayment options without penalties, and the ability to add collateral to improve your LTV ratio during market downturns.

Supported Assets and Geographic Limitations

Verify that your preferred cryptocurrencies are accepted as collateral. Bitcoin and Ethereum are universally supported, but support for altcoins varies significantly between platforms. Additionally, confirm that the platform serves Australian customers and complies with local regulations.

Understanding the Risks

Market Volatility and Liquidation

Cryptocurrency markets are notoriously volatile, and rapid price declines can trigger automatic liquidation of your collateral. Most platforms implement margin calls, giving you time to add collateral or repay portions of your loan before liquidation occurs.

To minimize liquidation risk:

• Choose conservative LTV ratios

• Monitor your position regularly

• Maintain additional crypto reserves for margin calls

• Consider using stablecoins as collateral when possible

Platform and Counterparty Risks

Recent years have seen multiple centralized lenders face bankruptcy, including BlockFi, Voyager, and Celsius. These failures highlight the importance of platform selection and risk management.

When evaluating platforms, consider:

• Financial stability and transparency

• Regulatory compliance and licensing

• Insurance coverage and security measures

• Track record and reputation in the industry

Regulatory and Tax Implications

Capital Gains Tax Considerations Taking out a crypto loan generally doesn't trigger a capital gains tax event since you're not disposing of your assets. However, if your collateral is liquidated due to margin calls, this may result in a taxable event.

Interest Deductibility If you use loan proceeds for business or investment purposes, interest payments may be tax-deductible. However, this deduction isn't available for personal purchases. Always consult with a qualified tax professional to understand the specific implications for your situation.

How to Get a Crypto Loan in Australia

Step-by-Step Process

1. Platform Selection and Research Compare platforms based on your specific needs, including loan amount, preferred collateral, interest rates, and regulatory compliance. Read user reviews and verify regulatory registrations.

2. Account Creation and Verification Create an account and complete identity verification (KYC) requirements. Australian platforms typically require government-issued ID, proof of address, and sometimes income verification for larger loans.

3. Collateral Deposit Transfer your chosen cryptocurrency to the platform's custody wallet. Ensure you understand the platform's security measures and withdrawal policies before depositing significant amounts.

4. Loan Configuration Specify your desired loan amount, terms, and repayment preferences. The platform will calculate your LTV ratio and provide loan terms based on current market conditions.

5. Fund Disbursement Upon approval, funds are typically disbursed to your nominated Australian bank account within 24-48 hours for most platforms.

Required Documentation

Most platforms require:

• Government-issued photo identification

• Proof of Australian address

• Bank account verification

• Source of funds documentation for large transactions

Conclusion

Crypto lending in Australia gives investors new ways to access cash without selling their holdings. Choosing the right platform, managing risk, and understanding both benefits and pitfalls are key to success.

These loans carry risks, including potential loss of collateral from market swings. Stick to conservative LTVs, borrow only what you can afford, and consider professional advice for larger decisions. As the market and regulations evolve, opportunities for Australians to unlock liquidity while maintaining long-term exposure to crypto will continue to grow.

Frequently Asked Questions

Are crypto loans legal in Australia? Yes, crypto loans are completely legal in Australia. The country maintains a crypto-friendly regulatory environment with clear guidelines for both platforms and borrowers.

Do I need to pay tax on crypto loan proceeds? Generally, borrowing against crypto doesn't trigger capital gains tax since you're not selling your assets. However, forced liquidation due to margin calls may create taxable events. Consult a tax professional for personalized advice.

What happens if my crypto collateral loses value? Most platforms implement margin calls when your LTV ratio approaches dangerous levels. You'll typically have 24-48 hours to add collateral or repay part of your loan before automatic liquidation occurs.

Can I repay my loan early without penalties? This varies by platform. Many Australian providers like Block Earner offer no early repayment penalties, while others may charge fees. Always review terms before borrowing.

How quickly can I access loan funds? Most Australian platforms offer same-day or next-business-day funding once your application is approved and collateral is deposited. DeFi platforms can provide near-instant access but require more technical knowledge.

What's the minimum amount I can borrow? Minimum loan amounts vary significantly between platforms. Some DeFi protocols have no minimums, while commercial lenders may require substantial amounts. Check individual platform requirements before applying.

About Arch

Arch is building a next-gen wealth management platform for individuals holding alternative assets. Our flagship product is the crypto-backed loan, which allows you to securely and affordably borrow against your crypto. We also offer access to bank-grade custody, trading and staking services.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Cryptocurrency investments are volatile and risky. Always conduct your own research before making investment decisions.