Subscribe to Entrepreneur for $5
Subscribe

Coinbase Allows Users to Borrow up to $1 Million, Using Bitcoin as Collateral

Coinbase users can borrow as much as 40 percent of the value of the Bitcoin in their account, up to $1,000,000, and can use either their bank account or PayPal to access the cash with no fees.

By
This story originally appeared on The Epoch Times

Cryptocurrency exchange Coinbase is now allowing customers to borrow up to 40 percent of their bitcoin value using bitcoin as collateral, the company announced Tuesday.

Coinbase users can borrow as much as 40 percent of the value of the Bitcoin in their account, up to $1,000,000, and can use either their bank account or PayPal to access the cash with no fees.

Customers will need to make $10 minimum monthly interest payments, and Coinbase is offering flexible repayment schedules.

The loans will be issued with an annual percentage rate of 8 percent, and borrowers won’t be required to show credit checks, Coinbase said.

“The Bitcoin you use as collateral remains safely held by Coinbase. It’s not lent out or used for any other purpose,” Coinbase said.

However, the borrowing minimum and maximum amounts may vary by state, Coinbase added.

The announcement comes shortly after the U.S. Securities and Exchange Commission (SEC) threatened to sue Coinbase if the crypto exchange went ahead with its plans to launch a program allowing users to earn interest by lending crypto assets.

Coinbase announced plans to drop the the crypto lending product in June. The program would have provided users with a high-yield alternative to traditional savings accounts, earning them a 4 percent annual yield on their USD Coin, a stablecoin that can always be redeemed one-to-one for USD.

The national average for a traditional savings is typically around 0.07 percent, with high-yield savings accounts still falling well short of even 1 percent, Coinbase said.

“Our goal is to create great products for our customers and to advance our mission to increase economic freedom in the world. As we continue our work to seek regulatory clarity for the crypto industry as a whole, we’ve made the difficult decision not to launch the USDC APY program,” the crypto exchange announced in June.

“We have also discontinued the waitlist for this program as we turn our work to what comes next. We had hundreds of thousands of customers from across the country sign up and we want to thank you all for your interest. We will not stop looking for ways to bring innovative, trusted programs and products to our customers.”

Despite pulling the plug on its crypto lending product, Coinbase is still expanding multiple other programs, including opening its highly-anticipated NFT marketplace for which over 2 million people are already on the waitlist.

The exchange is also expected to release its third-quarter earnings on Nov. 11. Its second-quarter earnings in August blew estimates out of the water, supported by the growing popularity of bitcoin and other cryptocurrencies trading.

Coinbase reported diluted earnings per share of $6.42 for the second quarter, beating estimates of $2.82, while its revenue was up 1,040 percent compared to the second quarter of 2020, coming out at $2.03 billion. 

By Katabella Roberts

 

Katabella Roberts is a reporter currently based in Turkey. She covers news and business for The Epoch Times, focusing primarily on the United States.

The Epoch Times

Written By

The Epoch Times is the fastest-growing independent news media in America. We are nonpartisan and dedicated to truthful reporting.

We are free from the influence of any government, corporation, or political party—this is what makes us different from other media organizations. Our goal is to bring our readers accurate information so they can form their own opinions about the most significant topics of our time.

We don’t follow the unhealthy trend of agenda-driven journalism prevalent in today’s media environment. Instead, we use our principles of Truth and Tradition as our guiding light. We highlight in our reporting the best of humanity, the valuable lessons of history, and traditions that are beneficial for society.

The Epoch Times was founded in the United States in the year 2000 in response to communist repression and censorship in China. Our founders, Chinese-Americans who themselves had fled communism, sought to create an independent media to bring the world uncensored and truthful information.

The Epoch Times has received numerous awards for our reporting and design, including from the New York Press Association, the Society of Professional Journalists, and the Society for News Design.

The Epoch Times’ media network currently covers 21 languages and 33 countries.