Cryptocurrency exchange Coinbase Inc. is offering U.S. customers an alternative to high-interest personal loans: borrowing against their bitcoin holdings.
Customers can borrow up to 30% cash against their holdings and interest on the loans will be at 8%, with terms of one year or less, according to a report in SiliconAngle.
To apply, customers just sign up with a few taps on their smartphone and if eligible, can receive cash within two to three days.
“We hear from customers that they need cash for expenses like home renovations or car repairs, but they do not want to prematurely sell their crypto or take out high-interest loans that could come with 20%+ APR,” Thorsten Jaeckel, Coinbase’s product manager said in a blog post . “With portfolio-backed loans on Coinbase, customers can borrow cash quickly from their Coinbase accounts.”
Coinbase will not reinvest the holdings elsewhere, but will keep the bitcoin at the exchange.
The loan service is currently available to customers in states where Coinbase his licensed to provide a lending service which includes; Alaska, Arkansas, Connecticut, Florida, Georgia, Illinois, Massachusetts, New Hampshire, New Jersey, North Carolina, Oregon, Texas, Virginia, Nebraska, Utah, Wisconsin and Wyoming. Coinbase is also pursuing licenses in other states to expand the service in the future.
