Digital Assets: Coinbase Users Can Borrow Upto $1M Against Bitcoin Holdings
The move by Coinbase will add to the liquidity allure of investing in bitcoin.
Global cryptocurrency exchange Coinbase (NASDAQ: COIN) announced in a tweet today that it would allow users to borrow against their bitcoin. (Bitcoin.com)
“Big news for the #BTC set …
We’re excited to announce that eligible customers can now borrow up to $1 Million USD from Coinbase.
Learn more here https://t.co/3aKzoWkmqP pic.twitter.com/LC3s9ARp3K
— Coinbase (@coinbase) November 2, 2021”
The link leads to a web page that provides the salient features of this offering from the crypto exchange.
Key features of the ‘line of credit’ facility
- No need to sell your bitcoin (and incur a tax liability) if you need cash urgently, say for car repairs
- Instead, borrow from Coinbase to get cash without selling your bitcoin.
- No fees or credit checks are required for availing the facility
- Only a low APR of 8% applies
- Each month you only need to pay the interest due ($10 min).
- Work out a repayment schedule for the balance convenient to you
- Coinbase pays out the loan instantly to your PayPal account or your bank account
- Line of credit offer currently available to residents of the following US states: AK, AR, AZ, CA, FL, ID, IL, NC, NE, NH, NJ, NY, OH, OR, TN, TX, UT, VA, WA, and WY.
- Limit for borrowing is maximum 40% of the value of your bitcoin holding in your account
- The bitcoin you use as collateral remains safely held by Coinbase. It’s not lent out or used for any other purpose.
- No prepayment or late fees apply.
It is not known at this time whether the SEC will have any reservations about this latest product offering from Coinbase.
Previously, the exchange had said it will allow customers to earn as much as 4% APR on deposits of USD Coin under its so-called Lend plan.
The company put that proposal in cold storage after the SEC threatened legal action if it implemented it.
Related Story: Coinbase to Allow Loans Against Bitcoin Holdings
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