Major cryptocurrency exchange Binance just took another step forward in expanding their services as they enter the crypto lending industry.
Binance announced the launch of its new lending platform on August 29 at 6:00 a.m. (UTC).
In the first phase of loan launch, 14-day fixed term BNB (15% annualized interest rate), USDT (10%) and ETC (7%) loan products will be available.
“Annualized interest rates for future phases will be adjusted based on market reception of this initial phase,” the company said.
The designated fixed limit per account for BNB and USDT denominated loan products will initially be set at 500 BNB and 1,000,000 USDT respectively.
“Binance users can decide the amount of tokens they wish to lend at the time of subscription and will be able to collect funds with guaranteed interest after the designated subscription period,” the exchange claims, adding that it will assess from new parts to be supported as demand-driven loan products.
According to Binance CEO Changpeng Zhao, “Loans on Binance go to borrowers on margin, who pay interest. Simple.”
“It will also increase the availability of funds to lend to margin traders, so expect the (previously low) margin limits to increase a bit. Again, Binance is just a matchmaker,” a- he added.
Following the announcement, the price of BNB fell and is down (13:02 UTC) 1.3% in the last hour and 0.5% in the last 24 hours.
As noted, the crypto lending market has seen increasing interest over the past 12-18 months. More and more HODLers are using their digital assets as collateral for fiat currency loans. While the reasons for taking out loans are endless, one of the main arguments in favor of a crypto-backed loan is that it can help investors lower their crypto tax bill.
In the market there are several crypto lenders such as BlockFi, Celsius network, Nexo, EthLend, Genesis, Maker and others.
According to a recent report by crypto startup gray chain, crypto loans already represent more than $ 4.7 billion in the industry. However, the estimated annual interest income is only $ 86 million.