Coinbase Loans: Are They The Best In The Industry?

In today’s cryptocurrency news, we are reviewing the loans offered by exchanges on the market. Specifically, we are talking about Coinbase loans and whether they are leading the way in the industry.

As you may know, the major US-based crypto exchange and wallet provider Coinbase announced its plans to launch lending services in the US this autumn. But how will they compare to what other industry players are already offering?

The truth is, details are scarce at this moment. However, the Coinbase loans, as the exchange said, will be put to place and users will be able to borrow using Bitcoin (BTC) as a collateral. This was a major update in the Bitcoin news – especially when the exchange added that the service will allow users to borrow up to $20,000 which represents a maximum of 30% of their BTC holdings with an annual 8% percentage rates.

Compared to other companies, the Coinbase loans are impressive but also more restrictive, especially with the lower maximum loan-to-value (LTV) rate (the 30% one) and the APR at a relative high. Also, their competitors offer a wider selection of possible collateral. Below, we are listing some of the competitors of the Coinbase loans.

• First in the list is the UK headquartered Celsius Network that offers a one-year $1,000 loan against BTC with a similar LTV rate of 33% and an APR of 2.77%. This is paid with the native CEL token.
• Next is the US based peer to peer crypto backed loan platform SALT Lending, which offers loans of at least $5,000 with an LTV rate that goes between 30% and 70%. For a one year loand that is backed by BTC in 30%, the APR is also lower than the one in the Coinbase loans – standing at 5.95%.
• The Binance news show that the exchange is already offering crypto loans, but are only available in Tether (USDT) and Binance Coin (BNB). If BTC is collateral, the LTV stands at 65% while the annual interest rate is 18.25%.

Coinbase said that they “hear from customers that they need cash for expenses like home renovations or car repairs, but they do not want to prematurely sell their crypto, or take out high-interest loans that could come with 20%+ APR.”

“With portfolio-backed loans on Coinbase, customers can borrow cash quickly from their Coinbase accounts,” the exchange said yesterday, adding that their clients can “get the cash in their accounts within 2–3 days.”