Coinbase offering fiat loans backed by crypto! Coinbase offering fiat loans secured by bitcoin holdings was announced by the company earlier today.
Coinbase is one of the largest and most regulated crypto exchanges in the world. They’re also going into the lending business. They’re 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. Borrowers will be able to receive their plans in 2-3 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 will only be available in 17 states, but Coinbase is aggressively pursuing licenses in other states and countries. They’re seeking the ability to expand its lending service.
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 on the exchange.
Coinbase is offering a low interest rate which will be attractive in of itself. This will also help with 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.
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