In an enterprising move to lure new users and augment exchange liquidity, Japanese digital currency exchange Bitbank has announced the launch of a Virtual Currency Lending Program.
Credit Your Bitcoins Out
As per a statement on May 28, 2018, Bitbank said its account holders could loan upwards of one bitcoin (BTC) to the exchange’s lending program, in return of a predetermined rate of interest.
Bitbank is one of Japan’s 16 fully-authorized digital money exchanges and offers eight digital currency trading pairs for its users. The exchange is positioned 31st in the world regarding average daily traded volume.
At first, interested customers shall be allowed to lend only BTC, with the exchange primed to incorporate ether, ripple, bitcoin cash, and litecoin to the lending program soon.
Bitbank is Japan’s second exchange to offer such a program. Earlier in April 2018, Tokyo-based GMO launched its cryptocurrency lending program for BTC, and rolled out support for several other digital currencies subsequently.
Japan’s Gaming Obsession Flows over to Bitcoin. Source: The Independent
Terms and Conditions Apply
The program shall pay out dividends in proportion to lent capital, alongside holding the funds for a minimum of a year.
In case you are preparing your budget already, here’s something to take note of – Bitbank shall run a “recruitment drive” for enlisting people it deems fit for the program, making it entirely exclusive.
The recruitment shall into consideration a user’s background and account history, and allow vetted indidviduals to lend BTC from the month after being “recruited” i.e., a user applying for the program in August 2018, shall be able to lend their bitcoins from September 2018, subject to approval.
The exchange seems stringent with the lengthy lock-in period.
“The cryptocurrency shall remain locked during the entire loan period. So, the cryptocurrency cannot be sold or transferred. Only when the loan period is elapsed or returned by Bitbank, the customer will be able to sell or transfer the cryptocurrency.”
Small Dividends Offered
As mentioned, users who provide their funds to the exchange shall receive “usage fees,” and, they are not following the much celebrated returns of digital asset investments.
For sums up to 5 BTC, the profit is an insignificant three percent, with users loaning upwards of 5 BTC receiving four percent interest, and those pledging upwards of 10 BTC coming in the highest bracket of five percent.
The fees for retracting funds in the midst of a lending period are relatively hefty. In case a lender chooses to withdraw their assets – for whatever strike of adversity – they are charged five percent, with no dividend paid out whatsoever.