The US crypto exchange Coinbase will be offering Bitcoin-supported loans to selected customers as early as next month. Investors can borrow up to 30% of the Bitcoin held on the exchange or a maximum of $ 20,000.
In one blog entry On August 13, Coinbase unveiled its new crypto lending business, which puts it in competition with Nexo and Blockfi. The service charges an annual interest rate of 8% on loans with a term of one year or less.
According to Coinbase, interested customers can deposit cash into their accounts in two to three days with just a few taps. The intent is to make the lending process as cumbersome as possible, shortening the application process and eliminating issues like credit checks.
The service will initially only be available in 17 selected US states. These are: Alaska, Arkansas, Connecticut, Florida, Georgia, Illinois, Massachusetts, New Hampshire, New Jersey, North Carolina, Oregon, Texas, Virginia, Nebraska, Utah, Wisconsin, and Wyoming.
The exchange, which has more than 35 million users worldwide, is trying to get licenses to add more cryptocurrencies as well as expand it to the pending jurisdictions.
"We want to give our customers even more control over their crypto investments while offering secure access to cash," Coinbase said in the post.
"We hear from customers that they need cash for expenses like home renovations or car repairs, but they don't want to sell their crypto early or take out high-yield loans …" he added.
A number of companies appear interested in joining the crypto lending business. Square's Cash App, a crypto-friendly peer-to-peer payment platform, announced that it is testing a loan product that will grant users short-term loans between $ 20 and $ 200. The interest rates are a flat rate of 5% per month.
What do you think of Coinbase's new bitcoin lending business? Let us know in the comments below.
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