Cryptocurrency exchange Binance is busy expanding its range of services. It recently launched Binance Loans and is now offering interest discount to early borrowers.
Binance users eligible for the platform
All users of the Binance ecosystem will be eligible to borrow on this platform against a host of cryptocurrencies, including Tether and BUSD. In an effort to bring more crypto borrowers to its platforms, Binance will offer interest rate discounts. The service will leverage existing cryptocurrency assets of its users as collaterals for loans. The loan periods will also differ and interest will be calculated on a daily basis. Users can get loans against collaterals of popular coins like Bitcoin and Ether.
The terms of the loan will range from 7 days to 90 days, which is very short-term lending when compared to traditional financial institutions. Users will get an additional 3-day duration for overdue loans. However, they will pay 3x the original interest if they opt for this extension. If the users fail to pay their loans during this period, their crypto holdings will be liquidated to pay off the debt.
The lowest interest rate on the platform will be 0.0224%. On Tuesday, it announced that it is offering a 20% discount on the interest rate.
Binance goes deeper in the crypto lending business
The world’s largest crypto exchange by volume is interested in creating diversified crypto offering to its users and has its eyes set on the lending business. It wants to attract and retain more users to its platform. Note that the company has started margin trading on the platform as well and plans to list some futures too.
Last year, it partnered with crypto borrowing and lending platform Cred which has over $300 million in credit lines. Their decentralized lending business allows stablecoin issuers, wallets and exchanges to offer their customers up to 10% interest. Binance has a staking service that is still in its early days but it is handling the other side of its lending business.
The staking service, known as Binance Lending, allows users to stake their coins and provide loans to those who may be interested in borrowing digital currencies. The users were initially able to lend Tether, Ethereum Classic, and Binance Coin but it aims to add more coins in the future. However, it hasn’t specified which coins it will offer to users and when. The firm also has a margin trading business providing BNB at an annualized interest of 10.9% and USDT at 10.03%.