Popular cryptocurrency exchange Coinbase will begin providing cash loans to its customers. Bitcoin will be used as collateral for these loans.
US-based cryptocurrency exchange Coinbase will allow customers to borrow cash using their Bitcoins as collateral.
According to the statement made by the exchange, the application will be offered to customers in certain US states in the near future. These states; Alaska, Arkansas, Connecticut, Florida, Georgia, Illinois, Massachusetts, New Hampshire, New Jersey, North Carolina, Oregon, Texas, Virginia, Nebraska, Utah, Wisconsin and Wyoming.
Authorities state that the feature will be activated in the autumn and that other cryptocurrencies will be accepted as security in the future. At the same time, the company is struggling to obtain a license to open the service to more states.
Coinbase will provide cash loans of up to 30 percent of its clients’ Bitcoin assets, or up to a maximum of $ 20,000. A fixed interest rate of 8 percent per year will be applied for a maximum repayment period of one year.
Cash loans, where crypto money is presented as collateral, are generally preferred by those who do not want to take high-interest loans. Coinbase says its customers can get a loan within 2-3 days without a lengthy application form or credit check.
This service provided by Coinbase is currently offered by many companies such as BlockFi, Nexo and Celsius Network.