Seychelles-based cryptocurrency exchange Bitget announced in a July 4 press release that it has launched a cryptocurrency lending product.
Users can bet coins to get more liquid assets.
Users of Bitget’s new crypto loan service will now be able to stake low-demand coins. In return, Bitget will lend more liquid assets to these users.
Bigett said the loan product takes a “dual coin approach.” A user who wagers one cryptocurrency receives the corresponding amount in another asset. It was not disclosed which cryptocurrencies will be included in the program.
The company added that each loan will have a specific interest rate, and said the loan amount is based on the market value of users’ bets. Users can pay off their loans early, but the borrowing period is pre-determined, the company said.
BitGet said it aims to provide a “smooth onboarding” and has modeled its loan service on traditional financial services. Once users set up collateral, they can automatically receive the loan amount and disburse the funds or adjust the collateral.
The company also said it would support withdrawals and provide “expedited review” of loan applications. Also, no details were given about security guarantees.
The cryptocurrency lending sector is growing, but has problems.
BitGet hinted that digital lending is on the rise.quoted GMI data This suggests that the market could be worth over $8.5 billion in 2022, growing 20.5% by 2032.
Despite the company’s optimistic outlook, several crypto lending firms (most notably Celsius) began bankruptcy in 2022 after failing to meet withdrawal requests.
Bitget’s lending service is intended to provide users with temporary access to additional funds rather than a permanent reward for staked funds, so Bitget may is vulnerable to Bitget did not say if it plans to reinvest or use the funds from customers.
It is also unclear whether BitGet’s lending services will be affected by US regulations on cryptocurrency lending. Bitget didn’t say if it plans to offer lending services in the US. got a license We plan to offer other services in the US in 2020.
Moreover, the move comes at a time when several international bodies recently banned cryptocurrency exchanges, including Singapore and Thailand, from offering loans on July 3.
An article about Bitget launching a cryptocurrency lending service first appeared on CryptoSlate.
