Bitbank Announces the Launch of Virtual Currency Lending Program
The Japanese cryptocurrency exchange Bitbank announced that it is launching a Bitcoin lending program that aims to attract new users and increase the liquidity of the exchange.
According to a statement released by the company, the exchange will be borrowing Bitcoin from its clients and paying them a fixed interest rate. The borrowing period is 12 months and so as to apply uses will have to pass the ‘recruitment month,’ in which the exchange will be analysing the interested individuals.
The loan period will start the month after the ‘recruitment period’ ends. That means that if the process took place in May 2018, the loan will start in June 2018 and last until May 2019. Only registered users at Bitbank are able to participate in the bitcoin lending program. If an interested person does not have an account in the platform, it will have to create one.
At the moment, only Bitcoin (BTC) is accepted, but other currencies will be added in the future, including Ripple (XRP), Bitcoin Cash (BCH), Ethereum (ETH), or Litecoin (LTC). All of them are the most known and important cryptocurrencies in the market.
The interest paid by the exchange will be 5% for those users that borrow more than 10 BTC. The rate will be decreasing: between 5 BTC and 10 BTC borrowed, Bitbank will pay 4% and but less than 5 BTC borrowed, the exchange will be paying a 3% rate.
If the contract is cancelled beforehand, the client will have to pay 5% including taxes.
The first cryptocurrency exchange offering a lending program was GMO, which is one of the fully licensed exchanges in Japan. At the beginning it offered the possibility to its users to lend Bitcoin, but later it added support to BCH, ETH, XRP, and ETH – something similar to what Bitbank plans to do in the future. The system in GMO is a little bit different because it offers its clients 90 or 150 days plan.
Bitbank is the 24th most important cryptocurrency in the market by trading volume ($73 million dollars in the last 24 hours). It offers different trading pairs, including XRP/JPY, BTC/JPY and BCC/JPY accounting for 98% of the total trading volume.