Coinbase To Launch Crypto Lending Services Across 17 US States In The Fall
U.S. cryptocurrency exchange, Coinbase enters the crypto lending business with its new “Borrow” feature expected to launch in the fall. The new lending feature allows Bitcoin (BTC) holders to get loans of up to 30% of their holdings or a maximum of $20,000. The San-Francisco based exchange now rivals nascent firms in the space such as BlockFi, SALT Lending, and Nexo, among others.
In a press release on Aug 12, Coinbase unveiled its new “Borrow” feature. This will be available across 17 select states in the U.S. – Alaska, Arkansas, Connecticut, Florida, Georgia, Illinois, Massachusetts, New Hampshire, New Jersey, North Carolina, Oregon, Texas, Virginia, Nebraska, Utah, Wisconsin, and Wyoming.
The feature will charge a constant interest rate of 8% p.a. for the duration of the loan with a maximum repayment period of one year. Customers will then receive the cash loan in a period of “2 to 3 days.”
Crypto lending services are growing in adoption as the crypto holders look for ‘short term loans’ to fend for their needs without necessarily selling their digital assets. Max Branzburg, head of product at Coinbase, stated,
“Customers may use bitcoin-backed loans in different ways depending on their financial needs, including for large expenditures like a home or car repairs, financing major occasions like a wedding, or helping to manage higher-interest personal loans or credit card debt.”
U.S. customers can now join a waitlist on the exchange to gain cash loans from their Coinbase accounts directly without any additional information. According to the exchange's statement, the collateral will be retained in the exchange, unlike other exchanges that reinvest the collateral.
The exchange will start off with Bitcoin but is applying for licenses for more cryptocurrencies in the future as well as an expansion to other jurisdictions, a spokesperson from Coinbase said.