Coinbase customers can now avail loans up to £0.73 million against the collateral of their bitcoin.
Coinbase is enabling eligible customers in select states to borrow up to 40% of the value of their bitcoin portfolio, up to £0.73 million in cash. Customers will be allowed to “take out a line of credit” without having their credit history checked, according to the crypto exchange. The funds will be transferred to their PayPal account or bank account via ACH.
Coinbase also offers an easy payback period in addition to a set APY of 8%. Customers just need to pay the interest on their monthly payment in order to pay off the balance afterwards. Fixed-term loans will also be made available, which are now exclusively available to Coinbase users in Connecticut. Customers will be able to borrow as much as 30% of the value of their bitcoin portfolio, up to £73,000, over the course of a year with these fixed-term loans.
The crypto exchange platform also stated not to report any “loan-related information or activity to credit reporting agencies at this time”. Coinbase further added that the bitcoin retained as collateral would be kept in its possession and would not be loaned out or used in any way.
Coinbase’s new service comes just one month after the company said it will no longer be offering its “Lend” product. Coinbase had talked about the product earlier this year when it said users could earn 4% APY on their USD Coin deposits. The Securities and Exchange Commission, however, learned about the scheme in September and threatened to punish Coinbase if it launched the feature.
Coinbase opted not to offer the product after a public outcry. Given the authorities’ previous response, it’s still unknown how they’ll react to the newest disruptive offering from the largest cryptocurrency exchange in the United State.