ByBit, a cryptocurrency exchange located in Dubai, has launched a cryptocurrency loan facility, joining a small group of large exchanges that provide interest-bearing lending facilities.
Cryptocurrency exchange ByBit is the latest big platform to offer consumers an in-house crypto loan option.
On May 2, the Dubai-based exchange announced the debut of the service, which would pay interest to customers who deposit cryptocurrency through the platform’s new offering. The programme promises hourly interest payouts from lending pools, and lenders may deposit and redeem lent cryptocurrency tokens with no lock-up periods.
Meanwhile, ByBit exchange borrowers can take out loans to access funds for a variety of trading options on the platform. Borrowers must deposit collateral assets equivalent to or higher than the loaned amount to protect lenders’ investments.
ByBit CEO and co-founder Ben Zhou stated that the crypto exchange’s intention is to provide consumers with a way to produce profits, while expert traders may obtain funds from lenders for more complex trading choices on the exchange.
ByBit is the most recent major bitcoin exchange to provide cryptocurrency financing services. Binance has a few services that allow customers to earn interest on their bitcoin investments.
KuCoin is a top five cryptocurrency exchange by trading volume that provides financing on a wide range of coins. OKX provides a loan facility that allows users to borrow cash against deposited tokens, but it does not allow user lending on its exchange platform.
Following a stern warning from the US Securities and Exchange Commission, American cryptocurrency exchange Coinbase abandoned plans to launch its own Lend service in September 2021. The offering was classified a security by the US regulator, with Lend guaranteeing 4% annual returns on USD Coin (USDC) investments.
Kraken was accused of exceeding regulatory bounds in the United States, which resulted in a $30 million settlement with the SEC in February 2023 for the operation of its crypto asset staking-as-a-service programme.
While only a few major cryptocurrency exchanges provide specialized lending services, the decentralized finance (DeFi) space offers a plethora of opportunities for cryptocurrency users to earn interest on loaned digital assets.