Coinbase offers Bitcoin cash loans up to $20,000

Coinbase, the digital currency exchange, will offer bitcoin-backed cash loans to select customers starting next month, the San Francisco-based company announcement on his blog this week.

Customers from 17 states were invited to join the waiting list borrow up to 30% of their bitcoin holdings. Maximum loan is $20,000 at 8% for one year with no credit check.

“With today’s announcement, we want to give our clients even more control over their crypto investments, while providing secure access to cash at the same time,” Thorsten Jaeckelproduct manager for Coinbase, wrote on the blog.

Coinbase said it launched the service in response to customers who said they need money for expenses such as home renovations or car repairs, but would rather not sell their cryptocurrency prematurely or take out interest rate loans. high interest.

Initially, loans are available in the following states through the waitlist: Alaska, Arkansas, Connecticut, Florida, Georgia, Illinois, Massachusetts, New Hampshire, New Jersey, North Carolina, Oregon, Texas, Virginia, Nebraska, Utah , Wisconsin and Wyoming. .

The exchange, which has more than 35 million users worldwide, said it was working to secure licenses to add more cryptocurrencies as well as expand to jurisdictions.

bitcoin.com reported Coinbase will compete with Nexo and Blockfi.

Additionally, the website reported that Square’s Cash App, a cryptocurrency-enabled payment platform, is testing short-term loans between $20 and $200 at a fixed interest rate of 5% per month. .

Liberty Street Economics, a research blog of the Federal Reserve Bank of New Yorksaid in a post that the usual distinction between “token-based” and “account-based” cryptocurrencies is too simplistic because several popular digital coins, including bitcoin, could be both.

A token-based system, he says, means a system where validation of the object used to pay is required, while an account-based system verifies the identity of the person paying.

Currency, according to the Post, is a traditional token-based system, where people pay for goods or services and all that is needed is the knowledge that the person has enough valid currency to make the payment.

In June, the New York State Department of Financial Services (DFS), which oversees 1,500 banks and financial institutions and more than 1,400 insurance companies, proposed a conditional licensing framework that promises to make it easier cryptocurrency startups.

According to the proposal, emerging companies participating in the program can apply for a conditional license from DFS if they partner with an existing business authorized by DFS to engage in virtual currency business.

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