Coinbase had started a service that allows people to borrow cash by putting up Bitcoin as collateral. Earlier available in just five states in the United States the company is now expanding it to fifteen states. The company is offering an alternative to people who don’t want to liquidate their money and need money urgently.
Big news for BTC hodlers …
We’re expanding the number of states where US customers can borrow cash using Bitcoin as collateral. Eligible customers can now borrow up to 40% of their BTC holdings in cash without having to sell.
— Coinbase (@coinbase) June 9, 2021
As selling Bitcoin is a taxable gain or loss Coinbase has set up an alternative to this selling, borrowing without selling your Bitcoin. The borrowing involves no fees or credit checks just an annual interest rate of 7.9%.
The repayment schedule is absolutely flexible with no due dates in the contract. The borrower can pay the balance in any amount of time that works for him/her. The person can borrow up to 40% of your bitcoin’s value, up to $100,000. Although the size and terms of the line of credit may vary based on the value of borrowers’ Bitcoin collateral and state of residence. The cash will immediately be deposited in your bank or Paypal account and you can have access to the borrowed cash without paying any transaction charge while selling.
Each month the person has to only pay the interest to keep his repayment on schedule. The minimum interest will be $10. The Bitcoin of the borrower will be safely held by Coinbase and will not be lent out/ used for any other purpose. No late fees will be incurred on payments being late.
This is big news for all Bitcoin users as they can now use their Bitcoin as collateral to borrow money and wouldn’t have to sell it in times of urgent need. With a low interest rate and no repayment date, it is a good opportunity.