Coinbase’s customers have been introduced to a new offering which is going to offer them seeking of loans up to a maximum limit of US$ 1 Million against the security of their Bitcoins held with the firm. No credit history of the customer is required, however, Coinbase would be charging markup @ 8% per annum. Coinbase also clarifies and undertakes to the loan seeker customers that their Bitcoins, given to the firm as “collateral”, will remain in the safe custody of the firm and that they will not be used for any other purpose such as onward investment or for earning any profits.
An announcement of introducing a new customer-oriented feature at the platform has been announced by world’s leading virtual currency firm, Coinbase. The announcement was revealed on 2nd November, 2021 wherein Coinbase apprised introducing of loan facility to the customers. The firm stated that it is pleased to offer lending facility to each and every customer from the US. A customer can move an application for availing a loan facility with a maximum limit of US$ 1 Million. As a collateral, the firm will be bound to accept customer’s Bitcoin lying with the firm as security against the loan facility.
The firm also noted that every customer of Coinbase would be eligible to avail the loan offer. It informed that the firm will be charging interest/markup @ 8% on yearly basis. However, the firm will not be authorized to use customers’ Bitcoin given to the firm as security for any purpose such as investment or earning profits.
As regards the loan, Coinbase told in the announcement that there will be no requirement for presenting any credit history. Similarly, there will be no late payment charges or fee of any kind on the loans. At the beginning of every month, however, the customer would be required to pay a minimum of US$ 10% against settlement of the loan. In addition, any interested customers can obtain a loan upto 40% of the value of his or her Bitcoins kept with the firm. The repayment period will not be more than 2 years, clarified Coinbase.
The loan facility offer of Coinbase would be rolled out and made available to the customers in more than twenty states.
This is the same offer which the Coinbase wanted to introduce earlier. However, before the offer could be launched, it was objected to by the Securities & Exchange Commission of the US (SEC). SEC believed that such an offer would be in violation of the laws of whom SEC is the guardian and protector. SEC then issued an official warning to Coinbase that it is not authorized to provide for lending facility. However, the proposal for the said offer was thereafter modified by Coinbase. It is on the basis of that modification Coinbase is going to offer lending services.