The Rise of Coinbase’s Crypto Lending Service for Institutional Clients
Did you know that Coinbase (COIN) has recently launched a crypto lending service specifically designed for institutional clients in the U.S.? This move comes as a response to the aftermath of Genesis and BlockFi, two firms that faced significant losses and even bankruptcy.
Through this service, institutional clients can lend money to Coinbase, primarily in the form of crypto assets. To ensure safety, Coinbase requires more collateral than the loan’s value, with daily adjustments to maintain stability. Once Coinbase receives the funds, it can then lend the money to institutional trading clients, functioning similarly to prime brokerage services offered by traditional banks.
It’s important to note that this new service is different from Coinbase’s canceled Lend program, which targeted retail customers and faced regulatory objections. By focusing on institutions, Coinbase can operate under less burdensome regulations, assuming that larger investors possess the necessary expertise to navigate the field.
Hot Take: Empowering Economic Freedom Through Crypto
With its latest crypto lending service, Coinbase aims to revolutionize the financial system and provide individuals with greater economic freedom and opportunities. By building trusted crypto products and services, Coinbase hopes to support the growth of the cryptocurrency market and bring one billion people into the world of crypto.
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