On Monday Binance announced that it was venturing into the lending business as the crypto exchange seeks to appeal to customers and thus attract deposits.
Users to receive annualized interest of 15%
The company indicated that the new offering Binance Lending will be available to all customers on a first come first served basis from August 28th. Customers holding Ethereum Classic (ETC), BNB, and Tether (USDT) will be able to earn interest. The company has indicated that the annualized interest for the first BNB lending product that has an initial period of 14 days has been set at 15%. Each account has a maximum cap set initially at 500 BNB 1,000 ETC and 1 million USDT.
Binance has put a total cap of 5 million USDT, 20,000 ETC, and 200,000 BNB. If the crypto exchange manages to get full subscriptions for the initially planned products, then they will pay interests of 19,178 USDT, 53 ETC and 1,150 BNB which is equivalent to around $50,000.
Users will have to decide on the number of tokens they will be willing to lend during the subscription. They can retrieve the funds plus interest after the specified subscription period.
Users can subscribe to any product with guaranteed interest
Binance CEO, Changpeng Zhao stated that Binance Lending is easy and intuitive to use. He added that subscribers would be able to subscribe to any product and earn interest. Each product has guaranteed interest rates so the subscriber’s crypto balance will always grow irrespective of the market movement.
The crypto exchange has indicated that the new offering will be evaluated constantly to add more tokens and coins depending on demand and value. The company had updated its Lending FAQ page by including the Binance Lending Service Agreement.
The news about the lending does not come as a surprise as the CEO had hinted in a recent event in London. This move by Binance is one of its ways of diversifying its business to retain and attract users days after rolling out margin trading and borrowing. The company has also revealed that it plans to include futures on its cryptocurrency exchange platform.