Japanese financial giant SBI Holdings just launched a cryptocurrency lending service through its crypto subsidiary SBI VC Trade.
According to an official announcement on November 24, the new crypto lending platform will allow users to borrow their crypto via SBI and earn an interest rate of 1%, including tax.
Credit Service Details
The new service, VC Trade Lending, will initially support the main cryptocurrency Bitcoin (BTC), with the company planning to add additional support for Ether (ETH) andÂ XRP. The minimum loan amount is 0.1 BTC or $ 1,840 at the time of publication, while the maximum amount is capped at 5 BTC or $92,000.
According to the financial service provider, there are no account management fees or annual membership fees for VC Trade Lending. The service also does not charge any fees for deposits made in Japanese yen or crypto but continues to charge for yen withdrawals.
SBI is the main financial institution in Japan operating in the crypto industry. In early October 2020, SBI foreign currencies and derivativesÂ mergedÂ with the SBI Liquidity Market and acquired TaoTao, a cryptocurrency previously 40% owned by YJFX Yahoo Japan. The company also operates its own crypto business through its subsidiary SBI VC Trade.
Bitcoinâ€™s Volatility Will be an Issue
The company says that existing cryptocurrency lending programs pose inherent risks to associates â€“ for example, faulty smart contracts or associates who face bankruptcy and cannot return funds when needed.
However, the bank refers to a better business where all their customer lending purposes for cryptocurrency lending services are SBI group companies that pride themselves on high reliability so you can use them with confidence.
However, the Tokyo-based financial operator saidÂ Bitcoinâ€™s instabilityÂ would remain a problem â€“ even the potential for loss of value to zero if macroeconomic trends changed â€“ and was cautious when working with new services.
SBI Partnership With Ripple
The company is also a major partner of Ripple, which was the fourth-largest market cap for crypto at the time of publication.Â In late October 2020, SBI CEO Yoshitaka Kitao said Ripple might move to Japan if it decides to leave the US.
SBI Holdings is Rippleâ€™s largest shareholder as of now, leading to rapid growth in Asia since the partnership. Ripple needed support from large financial services companies to integrate its services, especially from an advertising perspective.
With SBI as a cheerleader,Â RippleÂ has forged partnerships with other stock exchanges and banks in Asia, which are also part of RippleNet. Apart from connecting Ripple with other financial service providers, SBI is also driving the Money Tap settlement network, providing RippleNet software that does not use XRP.