The prominent crypto exchange Coinbase has developed an exclusive service for crypto lending. The service targets institutional consumers operating within the jurisdiction of the United States. It assists in filling the gap created by the recent collapses of the top platforms such as BlockFi and Genesis. The revelation of the respective project emerged on the 1st of September in a US SEC filing.
Coinbase Provides Latest Service for Crypto Lending to Target Institutional Investors
The respective filing also discussed about the already collected $57M for the project. As per a person acquainted with the issue, users can lend money, especially cryptocurrencies, to the crypto exchange. Coinbase will reportedly provide collateral to the consumers, exceeding the loan’s value. The respective over-collateralization plays the role of a safeguard in the case of a disaster.
Then, Coinbase can provide secured loans to facilitate institutional trading consumers. This is just like the top brokerage service-providing banks in conventional finance. BlockFi and Genesis offered analogous lending services to clients in the United States. Nevertheless, they went through huge losses in the previous year. The respective move partially or completely pushed them into bankruptcy.
The New Service Is Distinct from the Former Scandalous Lend Project
The latest service is different from the Lend project that became controversial and Coinbase cancelled it in 2021. The target of that project was retail clients and the officials at the securities regulator of the US objected to it. The new lending service, on the other hand, focuses on institutions. This signifies that regulation is not burdensome on the belief that big investors possess the sophistication to tackle it.
With the respective service, organizations can lend digital assets to the crypto exchange. They can do it under consistent terms concerning a product that meets the requirements of a Regulation D exemption. The company is operating on updating the financial system by leveraging crypto for the provision of economic opportunity and freedom to the people.
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