Coinbase Borrow has given clients who already have loans until November 20, 2023, to pay back their debts.
The most centralized cryptocurrency exchange in the United States, Coinbase, has announced that Coinbase Borrow, its lending service, is closing down.Prior to this scheme, users could obtain fiat loans through it for up to $1 million, leveraging up to 30% of their Bitcoin holdings at an annual interest rate of 8.7%.
Users were originally told of the program’s decision to stop accepting new loan applications in May, which marked the start of the wind-down process.
Coinbase clarified further in its most recent release, indicating that existing loan holders must pay down any remaining loan sums by Nov. 20, 2023. Users who depend on the borrowing service for various financial needs will likely be impacted by this news and need to make alternate arrangements before the deadline.
In order to cancel all accounts after the cutoff, Coinbase will sell enough Bitcoin (BTC) as collateral to cover any outstanding debt. According to the agreement, interest rates will not alter, and early loan repayment is permitted without incurring any fees.
Coinbase’s regulatory uncertainties
This news comes after Berenberg Capital analysts claimed that Coinbase still had to deal with regulatory issues in the US despite Ripple’s legal triumph.
They believed that because Coinbase has already been sued for running an unregistered securities exchange, the Securities and Exchange Commission (SEC) could look into its decision to suspend its staking business in some states more closely.
A bipartisan group of US House Representatives members recently met with Coinbase CEO Brian Armstrong to discuss new regulations that would regulate digital assets.
This emphasizes how crucial regulatory debates are to the Bitcoin sector. Customers of Coinbase Prime Financing are unaffected by Coinbase’s decision to close Coinbase Borrow because these are two distinct businesses and services.
