Coinbase users can now borrow up to $1 million in cash using their Bitcoin as collateral, this information was revealed via the crypto exchange’s official Twitter handle.
Coinbase users can borrow as much $1million in cash
With this new feature, Coinbase customers in some selected states in the United States would be able to take “a line of credit” without the need of showing any credit checks, instead, they will be using their BTC holding with the exchange as collateral. One of the caveats to this new loan system is that users would be unable to borrow more than 40% of their holdings.
According to the Brian Armstrong-led exchange, borrowers can choose to withdraw the funds to either their PayPal account or to their traditional bank accounts. Though the exchange offers a number of flexible repayment methods, borrowers, however, must pay a minimum of $10 monthly interest on the amount they might have borrowed.
Aside from that, a fixed-term loan option is also available on the platform, but it is currently limited to Connecticut-based Coinbase customers alone. With this loan type, customers could borrow 30% of the cash value of their Bitcoin holding. They are eligible for up to $100,000 loan yearly, and it attracts a monthly interest of 8%.
You’ll recall that Coinbase and the Securities and Exchange Commission (SEC) had a faceoff recently over the crypto exchange decision to provide crypto lending services to its users.
Coinbase to introduce subscriptions?
In another development, Coinbase is gearing up its works as it reportedly looks to introduce a subscription-based service to users of its platform. This new service would see the exchange offer enhanced customer support and fee-less trading to its users.
Per Bloomberg, the exchange is experimenting with this new feature due to the growing pressure from other trading platforms like Robinhood who do not charge their users any trading fee.
According to available information, this new service is called “Coinbase One.” Analysts have predicted that this new development could make the earnings of the exchange which is projected to hit $50 billion by 2025 to become more predictable.