Crypto Lender BlockFi Increases All Stablecoin Rates amidst Regulatory Pushback
After making a series of cuts in its interest rates for crypto holdings in 2021, crypto lender, BlockFi has finally made the first increase of this year.
BlockFi, which sets the rates based on market dynamics for lending and borrowing, announced this week that starting October 1st, the company is raising increasing rates for all stablecoins held in BlockFi Interest Accounts (BIA).
The rates are only updated for stablecoins, and for cryptocurrency holdings, it remains unchanged.
Stablecoins supported by BlockFi includes BUSD, DAI, GUSD, PAX, USDC, and USDT held in its interest accounts.
For tier 1, which covers up to 40,000 units of stablecoin, the new APY offered is 8.5%, up from 8%. For above 40k units, a 2% increase in rates is offered, up from the previous APY of 5%.
This increase in rates comes while BlockFi is currently being restricted by local regulators in Texas, Kentucky, New Jersey, Alabama, and Vermont to offer their interest accounts on the grounds that it violates their securities laws.
The regulatory action only affects the creation of new BIAs, and current clients and other products are not affected.
The company is currently in “active dialogue with regulators regarding the BIA” and believes “it is lawful and appropriate for crypto market participants.”
“We welcome discussions with regulators and believe that appropriate regulation of this industry is key to its future success.”