Bitcoin holders who store their assets in the Coinbase exchange will soon be able to have their cake, and eat it too.
Zhelyazko Zhelyazkov at Cryptopotato reports that Coinbase is embarking on a program to allow Bitcoin asset holders to borrow 30% of their Bitcoin with an APR of 8%.
“As per an official recent announcement, Coinbase has set a specially designated waiting list for their customers, who might like to take up on the offer and borrow a given amount of cash,” Zhelyazkov writes. “The main idea is that via this new opportunity they will have some more control over their crypto investments, plus they will be able to use some of their assets in the form of fiat currency, without losing any of their Bitcoins.”
Reportedly, these Coinbase borrowers will be able to take out up to $20,000 against their Bitcoin collateral with a program that the company calls “portfolio-based.”
“We hear from customers that they need cash for expenses like home renovations or car repairs, but they do not want to prematurely sell their crypto or take out high-interest loans that could come with 20%+ APR,” write Coinbase spokespersons as quoted by Zhelyazkov’s coverage.
As of now, the program is only being built for use in some U.S. states: Alaska, Arkansas, Connecticut, Florida, Georgia, Illinois, Massachusetts, New Hampshire, New Jersey, North Carolina, Oregon, Texas, Virginia, Nebraska, Utah, Wisconsin, and Wyoming.
If it’s successful it’s likely that these types of e-lending programs will start to replace the usurious interest rates of conventional personal loans. Other companies associated with decentralized finance are also getting into the mix. One prime example is the offerings of a company called Cred that offers a flat 10% interest rate on both lending and borrowing of digital assets on the Cred platform.
The borrower’s world is never going to be the same. If you hate high-interest loans, be sure to take a look at how these brand new options can keep your crypto assets in place while still providing liquidity at very competitive interest.