The loan can be paid monthly with a minimum of USD 10.
The requested cash will be added “instantly” to a PayPal account or a bank account.
This article contains referral links. Know more.
Borrowing dollars in cash using bitcoin (BTC) as collateral? It is now possible in the United States (USA). Coinbase, one of the largest centralized exchanges, announced on Wednesday the loan tool using the leading cryptocurrency as collateralizer.
According to the information shared by the cryptocurrency exchange on its official website, it is a financial tool with which You can borrow up to 40% of the value of bitcoin in an account, or up to $ 1 million.
They explain that only 8% of the annual interest applied to the operation will be requested (effective as of June 1, 2021), without the need for the credit check, avoiding having to pay taxes (due to the characteristic of the financial movement), as well as having to lower the amount of BTC in the personal account.
Coinbase clarifies that the credit line is available, for now, only for the United States (USA), specifically for those who live in the states of Arkansas, Arizona, California, Florida, Illinois, North Carolina, New York, Ohio, Ontario, Texas and others.
An easy solution for urgent cash needs
Coinbase defends its new tool knowing that many users had to sell their bitcoins to be able to pay for things urgently, incurring “taxable” gains or losses.
“Now it is not necessary,” they say. “Borrow from Coinbase for cash without selling your bitcoin with no fees or credit checks involved, just a low annual interest rate applied to the operation of 8%,” they stress.
About paying the loan, Coinbase explains that you can done at a convenient time and that per month, the interest owed can be paid, with a minimum of USD 10.
No prepayment or late fees. This line of credit has a demand function and is repayable within 2 years after opening.
Coinbase, cryptocurrency exchange.
Indicates the exchange that the requested cash will be added “instantly” to a PayPal account or a bank account through a direct transfer, while the bitcoin used as collateral, will remain safe and it will not be used “for any other purpose.”
Not the first loan service
The Coinbase news, while enthusiastic for the cryptocurrency market and its consequent expansion, it is not the first of its kind. Other exchanges have launched similar tools.
This is the case of BitBase, in Spain, a company linked to the ecosystem known for having physical establishments and bitcoin ATMs in several cities in the country. His service, called BitCredit, goes the same way.
It is a tool that allows you to acquire euros (EUR) using cryptocurrencies such as bitcoin, ether, dash and dogecoin as collateral, for amounts ranging from EUR 500 to EUR 100,000, as reported by CriptoNoticias.
It is even known that around 420 thousand bitcoins were being used as collateral or collateral in lines of credit, according to a study by analytics firm Arcane Research and cryptocurrency exchange Bitstamp published in February.
At the time, there was talk of an average amount of $ 20 billion. They even affirmed that loans with bitcoin as collateral were a mechanism that allows access to loans faster and easier “To go through a bank and mountains of paperwork.”