Coinbase to Offer Bitcoin Loans to US Customers

Coinbase is going to allow it’s United States customers to borrow fiats with Bitcoin as collateral, the popular exchange and wallet platform announced on Thursday.
The San Francisco-headquartered exchange has already started accepting customers and putting them on the waitlist so that they can borrow when the full service is launched. The exchange did not specify any set deadline for launching the service, but it is aiming to offer it by the end of this fall.

Initially, the borrowing service will be limited to residents in 17 states in the United States: Alaska, Arkansas, Connecticut, Florida, Georgia, Illinois, Massachusetts, New Hampshire, New Jersey, North Carolina, Oregon, Texas, Virginia, Nebraska, Utah, Wisconsin, and Wyoming.
The exchange is pursuing licenses in the other states and jurisdictions to offer the upcoming Bitcoin “borrow” services.
Can it beat the competition?
The official announcement detailed that customers can borrow up to 30 percent of the value of their deposited Bitcoin holdings, the loan-to-value (LTV) ratio is much lower than offered by other popular platforms in the market. For example, BlockFi, a popular US-based Bitcoin lending and borrowing platform, is offering up to 50 percent of LTV against Bitcoin collaterals.
There will also be a cap of $20,000 for the total borrowing amount for the US customers along with a fixed annual interest rate of 8 percent. The maximum borrowing period would be up to a year.
The exchange, however, might revise the borrowing interest rate in the future based on the various market conditions.
Apart from Coinbase, other popular crypto platforms are expanding into – some are partnering with existing players, while others are launching proprietary services.
However, Coinbase’s offering will definitely stand out as it will offer the loans in the US dollars rather than in some fiat-pegged stablecoins.

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