Coinbase Targets Large Investors With Its New Lending Service

TL;DR

• Coinbase has launched a new lending service targeting large investors. 

• The new service differs from the Lend Program Coinbase canceled in 2021.

Coinbase Launches A New Lending Service

Coinbase, one of the leading cryptocurrency exchanges in the world, has launched a new lending service. The company revealed this in a U.S. Securities and Exchange Commission filing on Sept. 1.

According to the filing, $57 million had already been raised for the lending program. A source close to the matter revealed that clients can lend Coinbase their crypto assets and earn collateral exceeding the value of the loan. 

A Coinbase spokesperson stated that;

"With this service, institutions can choose to lend digital assets to Coinbase under standardized terms in a product that qualifies for a Regulation D exemption. Coinbase is working to update the financial system that was built over 100 years ago, leveraging crypto to provide people with more economic freedom and opportunity. To advance this purpose, Coinbase is building the most trusted crypto products and services, and supporting other builders to bring 1 billion people into crypto."

Coinbase will be issuing loans to institutional trading clients. The service is similar to the prime brokerage service banks provide in traditional finance

The cryptocurrency exchange will be filling a need in the market following the collapse of Genesis and BlockFi. Coinbase said the new lending service differs from the Lend Program it shut down in 2021. Lend Program targeted retail investors, and the US SEC objected to the service. The new service targets institutional investors and traders.