This article comes from CoinDesk.com
Coinbase will allow U.S. retail customers to borrow fiat loans against as much as 30% of their bitcoin holdings in the fall, the San Francisco-based exchange announced Wednesday.
Coinbase is one of the largest and most regulated crypto exchanges to get into the lending business, and the exchange is setting conservative parameters on the product, capping credit lines at $20,000 per customer and offering an interest rate of 8% for bitcoin-backed loans with terms that are a year or less.
Customers will not need to fill out an application or go through a credit check, however, and borrowers will be able to receive their loans in two to three days.
“Customers may use bitcoin-backed loans in different ways depending on their financial needs, including for large expenditures like home or car repairs, financing major occasions like a wedding, or helping to manage higher-interest personal loans or credit card debt,” Max Branzburg, head of product at Coinbase, said in an emailed statement.
The product is available in only 17 states but Coinbase is pursuing licenses in other states and countries to be able to expand its lending service, he said. A waitlist opened Wednesday afternoon, including the tagline:
“Have you ever needed cash for something urgent, like a car or home repair? In the past, you might have sold Bitcoin to cover it and incurred a taxable gain or loss. Now you don’t have to.”
The exchange says it won’t reinvest the collateral elsewhere and will keep the bitcoin at the exchange, unlike some crypto lenders who rehypothecate collateral or invests deposits into perpetual swaps.
Adding a lending product can be a way for exchanges to keep customer funds at the exchange instead of moving them elsewhere, said Joseph Kelly, CEO and co-founder of crypto lender Unchained Capital. Square’s bitcoin-friendly Cash App also announced this week that it is testing a lending product that will offer customers short term loans of between $2 and $20.
Coinbase’s low interest rate will also allow it to operate in many states that would otherwise require additional licensing to avoid usurious lending practices.
“It’s a good bull-market product when customers have excess capital they’d like to do something with,” Kelly said. “We’ve almost never seen a monopoly lending market … I’d expect other exchanges to follow suit.”
The new Coinbase product is only available in the following states: Alaska, Arkansas, Connecticut, Florida, Georgia, Illinois, Massachusetts, New Hampshire, New Jersey, North Carolina, Oregon, Texas, Virginia, Nebraska, Utah, Wisconsin and Wyoming.
If you would like a step by step guide of how to create a Plug-N-Play Cryptocurrency portfolio built from Bitcoin, Ethereum, Litecoin and many other quality coins (some of which that pay you just to own them!), click the banner below:
Dan Watson and Arkham Industries provide an informational service only and are not responsible for any investments made applying this information. The results described are not typical and are not guarantees of future income. Any investment contains risk and is 100% the responsibility of the investor to assess the risks/rewards involved. It is possible to lose some or all of your investment. We assume no liability assumed or implied for your application of the information shared from the training programs.
I am not a financial adviser and for that reason, nothing I say or write should be taken as financial advice. This information is for informational and entertainment purposes only. I am not the owner of any of the programs mentioned on this website. I am also not connected to the presented websites in any way, shape or form. There is risk involved in trading, mining, lending, staking and investing in cryptocurrency. So any previous payments made by any website or an investment fund do not guarantee that payments will be steady and regular in the future. I am not responsible if a website does not pay out or shut down at anytime. So Join at your own risk. This information is created as per my personal experience. I do not take any responsibility for any losses that may occur. I do not give any financial advise.
Earnings and Income Disclaimer. We make every effort to ensure that we accurately represent these products and services and their potential for income. Earning and Income statements made by its’ customers and/or I are only estimates of what we think you can possibly earn. There is no guarantee that you will make these levels of income and you accept the risk that the earnings and income statements differ by individual. As with any business, your results may vary, and will be based on your individual capacity, business experience, expertise, and level of desire.