Wyoming, Wisconsin, Virginia, Utah, Texas, Oregon, North Carolina, New Jersey, New Hampshire, Nebraska, Massachusetts, Illinois, Georgia, Florida, Connecticut, Arkansas and Alaska.
Bitcoin Backed Loan Terms
Coinbase, with headquarters in San Francisco, California, is one of the largest and most regulated crypto exchanges to venture into the lending business. The centralized behemoth exchange is setting conservative parameters on the product, maxing credit lines at $20K per customer.
They offer a really low interest rate of 8% (lower than 22%APR on credit cards) for bitcoin backed cash loans with less than 12 months term. This is the next logical step for the heavyweight exchange as most newbie users store their Bitcoin on the exchange.
Low interest rate on Coinbase Borrow will allow it to work in states without additional licensing. Generally, there’s additional licensing process to go through if the APR is higher, to avoid abusive lending practices and cheating customers.
This is a great opportunity for Retail customers to fully take advantage of the Bitcoin cash loan. Thus, giving a chance for their Bitcoin to appreciate in value and using the loan to fund their life. Repay the loan later and make more profits. Remember, this strategy only works in bull market time.
Coinbase Borrow will be a head-on competition to centralized Lending Platforms like BlockFi, Celsius Network, Crypto.com and Nexo.
The best part is no hassle in filling out long applications or go through extensive credit check for customers. Remember, you leave your Bitcoin as the collateral security.
Also, the loan processing time is just 2 to 3 days. It is lightning quick and also completely online. You don’t have to do bank visits to sign documents or other random wasting time things. For successful entrepreneurs, time is money!
The “Coinbase Borrow” feature is on a waitlist. Invite only model currently. Also, we hear that is set to go fully live in the fall. Coinbase is just starting out with Bitcoin but has ideas to further explore other Crypto assets in the near future.
Coinbase gives you a personal loan and you can use it for what ever purpose you want, no questions asked.
Max Branzburg, Product head at Coinbase adds
Customers are free to use bitcoin backed cash loans for any purpose depending on their needs. It can be small purchases or even for large purchases like home repair or car repairs or pay off even higher APR credit card loans or personal loans higher-interest personal loans or credit card debt
Coinbase is working hard to get licenses in other states and even countries to expand its Borrow service. The waitlist includes the below tagline
Do you need cash for anything urgent? Have Bitcoin as collateral? It’s much better option than putting it on your credit card which charges 3X interest rate. Also, you don’t incur taxable situation if you borrow instead of selling Bitcoin to get cash.
The giant exchange adds that it won’t rehypothecate or reinvest the collateral elsewhere. Coinbase will keep the collateral of bitcoin just at the exchange. As a result, this makes it totally different from other Crypto Lending companies in existence now.
Adding the Coinbase Borrow product can be a way to keep customer funds at the exchange instead of moving them to a safer cold storage hardware wallet. Square Cash App is also testing lending product on the market. But, the ticket sizes are too low with really short term loans.
CryptoandFire believes there is ample space for many players in the Crypto lending industry. As more assets move into Cryptocurrencies, we need to give options to consumers to choose what works best for them.
There is enough space for BlockFi and Celsius Network to operate, even with more competition. Coinbase IPO is coming up and the company will naturally want to acquire new sets of users and new revenue sources to boost its balance sheet.
Having a behemoth exchange doing the lending operations makes it a no brainer for customers to invest. They are one of the highly regulated exchanges that is legitimate and will improve the lending industry standards further.
I am a data analyst by profession who loves to crunch numbers at daytime and come home wondering how my passive income numbers for the day look like. I believe in being rich rather than looking rich. Follow me for Cryptocurrency, FIRE, Personal Finance, Credit Cards and Digital Nomad updates