Digital Assets: Coinbase to Allow Loans Against Bitcoin Holdings

August 14, 2020 | Digital Assets, Latest News, News
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The cash loans, of up to $20,000, will be offered across 17 states.

This should be another shot in the arm for bitcoin adoption. Liquidity of holding is a much-desired feature of any asset, and U.S. digital assets exchange Coinbase is pulling out the stops on that one. In a Thursday blog post, the exchange invited US customers to sign up to a waitlist for the option to borrow up to 30% of their bitcoin (BTC) holdings. (Bitcoin.com)

20% + APR? No!

“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,” wrote Coinbase. “With portfolio-backed loans on Coinbase, customers can borrow cash quickly from their Coinbase accounts.”

The exchange said the procedure does not require a credit check and that customers can simply initiate the loan with a few taps.

The cash would be in their accounts within 2-3 working days.

The facility will be operational by this fall.

Coinbase terms and conditions

Borrowing cash using bitcoin as collateral:

  • Max amount of loan is $20,000, and subject to 30% of the value of the bitcoin portfolio holding
  • No credit check required
  • Pay just 8% APR
  • Each month you only need to pay the interest.
  • You can wait up to 1 year to repay the principal.
  • Additional terms may apply
  • Eligible states: Alaska, Arkansas, Connecticut, Florida, Georgia, Illinois, Massachusetts, New Hampshire, New Jersey, North Carolina, Oregon, Texas, Virginia, Nebraska, Utah, Wisconsin, and Wyoming.

Other top crypto lending platforms

  • BlockFi
  • Celsius
  • Nexo
  • Salt Lending
  • com

Joseph Kelly, CEO and co-founder of crypto lender Unchained Capital, observed to Coin Desk that offering collateralized loans is an excellent method to ensure that customers’ assets remain with the exchange and not moved elsewhere or liquidated.

“It’s a good bull-market product when customers have excess capital they’d like to do something with,” Kelly added, referring to the Coinbase loan-against-BTC offering.

Related Story:    Nasdaq-listed Company Microstrategy Bets $250M on Bitcoin

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