Coinbase said on November 3 that select users will be able to borrow up to $1 million from the exchange.
Is it possible that cryptocurrency exchanges will become the new banks and money lenders? The SEC issued a Wells Notice to Coinbase when the company attempted to launch its high-interest crypto “Lend” product. Without much hoopla, Coinbase later abandoned the initiative. However, a recent development suggests that the exchange may be trying something fresh again.
Big news for the #BTC set …We’re excited to announce that eligible customers can now borrow up to $1 Million USD from Coinbase. Learn more here👉https://t.co/3aKzoWkmqP pic.twitter.com/LC3s9ARp3K— Coinbase (@coinbase) November 2, 2021
What are the terms and conditions?
Users can borrow up to 40% of the value of their BTC in their accounts, up to $1,000,000, using a bank account or PayPal (depending on state rules). Despite the fact that there were additional terms, consumers just had to pay the required interest per month until the debt was repaid. There were also no credit checks, according to reports.
It’s worth noting, though, that the service is only available to Coinbase members in specific US states. The reported eligibility conditions,
“If you reside in AK, AR, AZ, CA, FL, ID, IL, NC, NE, NH, NJ, NY, OH, OR, TN, TX, UT, VA, WA, or WY, and have BTC in your portfolio, you may be eligible to take out a line of credit.”
It also added,
“Coinbase does not report any loan-related information or activity to credit reporting agencies at this time.”
One critic of the notion, though, was Dogecoin founder Billy Markus, who made a snarky remark about what may go wrong if the experiment went awry.
what could go wrong— Shibetoshi Nakamoto (@BillyM2k) November 2, 2021
Naturally, one thing preoccupies the minds of the majority of investors: what will the SEC have to say?
When investing expert Anthony Pompliano inquired as to which American politician would be the first to receive their salary in Bitcoin, Miami’s Mayor Francis Suarez stepped up to the plate and inquired about the procedure.
CEO Brian Armstrong of Coinbase was one of the first who got in touch with us. Employees could be reimbursed with cryptocurrency of their choice, according to a Coinbase post, which he shared with us.
The page clarified,
“If you choose to be paid in crypto, Coinbase will automatically convert your paycheck from U.S. dollars to crypto with no transaction fees.”