A Japanese firm listed on the Tokyo Stock Exchange recently unveiled loans that can be collateralized by three digital assets, namely Bitcoin, Bitcoin Cash and Ethereum. As of now, the maximum amount borrowable is capped at 300 million yen (approximately $2.7 million). Moreover, the company also has an overseas subsidiary outlet. The lending initiative, known as the Samurai Crypto loan, is run by Samurai Asset Finance, a subsidiary of Samurai & J Partners Ltd.
As mentioned above, the company will avail loans to crypto investors who own either BTC, BCH or ETH. Notably, customers will receive the funds in Japanese yen without liquidating their crypto position. The reason behind this is the high taxation rates imposed on the liquidation of digital currencies in Japan, going up to 55% in some instances.
Currently, the loan limits range from a minimum of 20 million yen ($180,000) to a maximum of 300 million yen ($2.7 million). The default repayment period is twelve months, although there are provision for extensions. The interest rates for these loans start from 7% to 155 annually, inclusive of commissions and extensions charges. If a lender fails to repay the loan in time, they will liable to a delinquency charge of 20% per year.
Previously, Samurai & J Partners was called Digital Design Co. Ltd. the company has been in operation for 22 years, primarily dealing in the provision of information services. Its subsidiary, Samurai Asset Finances, offers loans backed by various assets such as, real estate, credits, securities, movable properties, precious metals, and so on.
ICO Plan and Competition
Samurai outlined their intentions to start offering loans collateralized by digital assets in May 2018. The suggestion was subsequently approved by the company’s executive board. Furthermore, the firm has already created an overseas subsidiary and is planning to conduct an ICO to expand its scope of business.
However, this is not the first crypto-backed lending service in Jan. Recently, the Abic Corporation stated offering loans secured by Bitcoin. The loan limits for Abic range form a minimum 2 million yen ($18,000) to 1 billion yen ($9.3 million). The interest rate start from 35 to 155, with an annual delinquency rate of 20%. Also, Libra Credit announced a partnership with Binance Labs to provide fiat and cryptocurrency loans to investors who issue Binance coin as collateral. Libra is a crypto financial services platform while Binance Labs is a subsidiary of the Binance digital currency trading platform.