US-based Blockfi has now made an inroad into India. With this expansion, Indians can enjoy high rate interest on Blockfi’s account for two cryptocurrencies.
On Tuesday, the crypto startup which is domiciled in New Jersey disclosed that it has spread out its service to users in India. It now has its Blockfi Interest Account (BIA) for BTC and ETH in 65 countries.
According to one of the company’s representatives who spoke to Bitcoin.com,
As of this month, over $53 million in client crypto is stored with Blockfi. We saw a huge amount of demand from India over the last month and we’re excited to welcome their crypto community to our platform.
Products to be available to retail and institutions
Speaking further, the representative gave a hint as to the type of users that would avail themselves of the company’s products. According to him,
All of Blockfi’s products will be available to retail and institutions in India. Blockfi have already had clients from India sign up for our services.
The BIAs which was launched in March pay their users at the commencement of every month in cryptocurrency. The company makes it clear that it lends out the assets which are in these accounts to corporate and institutional borrowers and earns interest on them.
One fascinating thing about the product is that every customer who has a balance of up to and including 25 BTC or 500 ETH will earn 6.2% annual interest. This yearly interest is compounded monthly. They will give a tiered rate of 2% interest to all balances that exceed the limit. The company started offering the 2% rate on April 1 as a result of demand from businesses which was unexpected. Some of the firms that made the request include VC firms and crypto hedge funds.
Interest account to support more assets
We are yet to see all that the company can offer its customers. On Wednesday, Blockfi CEO Zac Prince spoke Bitcoin.com and added more information to what was earlier made available to the public. According to him,
We plan to support additional assets in the interest account but are not able to disclose which ones or specific timing at this point.
Lower Minimum Requirements
Part of the information which Blockfi shared on Tuesday was that they would lower the minimum requirement to earn interest. According to them, with effect from May 1, customers would need only to have 0.5 BTC in their account. The company also plans to lower it in the future.
Also, customers who already have up to 0.5 BTC and 1 BTC as of April 1 will be qualified to earn interest at the end of this month.
Any customer with up to 250 ETH in their account will equally earn 6.2% APY. Nevertheless, Blockfi confirmed that there is a drop in the demand for borrowing ETH. This change will also make the company adjust the ETH tier rate accordingly.
Competition among local exchanges
Blockfi is not the only crypto lending program in India currently. On 21 March, another crypto exchange Coincx launched a similar program that allows users to earn up to 2% monthly interest. They already have six eligible cryptocurrencies and will include more soon. The interest rates for the funds they deposit include BTC 2%, BNB 1%, USDT 1%, TUSD 1%, ETH 0.75%, and XRP 0.75%.
Speaking to Bitcoin.com on Wednesday, CEO Summit Gupta said that on his platform,
The annualized interest rate is 26.82% on BTC because the interest rates are good … and users can cancel anytime.
Gupta also claimed that his exchange gives 24% annual interest rate and needs only 0.01 BTC or 0.01 ETH to earn interest, compared to Blockfi’s 6.2% yearly rate on BTC and the minimum deposit of 0.5 BTC and 25 ETH. Besides, he said that while Blockfi’s lock-in period is one month, his exchange’s lock-in period is 7days. Moreover, Gupta noted that withdrawal on Blockfi takes 24 hours and sometimes up to 7 days while it is instant on his exchange.
Related Programs Worldwide
Programs related to Blockfi’s also exist across the globe. Some of them include Nexo which gives 6.5% annual interest on Stablecoins. Ledgerx’s Ledgersavings program also provides an annualized implied rate of around 16% on BTC at the moment. Compound service (an Ethereum-based program) offers different interest rates on BAT, DAI, REP, WETH, and ZRX that the users deposit with them.
There are also various crypto exchanges that are regulated in Japan which have related programs. Coincheck provides a lending program for BTC, offering up to 5% annual rate. The exchange was paying interest on 12 different cryptocurrencies before the January hack.
In May last year, GMO Coin which was launched initially for BTC started paying an annual interest rate of 5% on BCH, BTC, ETH, LTC, and XRP. This is likely to change every month. Bitbank, on the other hand, pays between 3% and 5% annual interest rate. The exchange supports only BTC at the moment but plans to include BCH, ETH, LTC, MONA, and XRP in the future.
Do you think these exchanges are capable of sustaining the lending programs in the long run?
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