Japanese financial giant SBI Group has concluded plans to roll out a crypto lending service that seeks to borrow cryptocurrencies from holders. According to the report, SBI has put aside a yearly interest of 1% on Bitcoin, and it intends to include XRP and Ethereum in the service in the future.
SBI says it will be introducing the crypto lending service via its crypto-based subsidiary, SBI VC Trade. According to the official announcement today, the service will be open to users who want to lend their crypto to SBI and earn interest on top of their funds.
The crypto renting service will borrow at the current price of $1,880 per 0.1 Bitcoin to a maximum of $94,000 (5 Bitcoin) from users. Interest will be paid at the end of the one-year borrowing term. The service is similar to what is obtainable in traditional bank settings, as customers receive interest for keeping their money with the bank for a certain period.
When the customer lends its fiat money to the bank, they earn a small fraction of the amount as interest yearly. The bank makes use of the funds to give out loans and other banking services.
Service will be limited to Bitcoin for now
The VC Trade lending service will first offer support only for Bitcoin (BTC). But, as explained by SBI, other cryptocurrencies will be added in the future, with XRP and ETH coming next. According to SBI, the lending service will not have annual membership fees or account management fees. Additionally, fees will not be charged for deposits made in crypto or Japanese yen. However, there will be a fee for the yen withdrawal.
As a major financial player in Japan’s crypto industry, SBI has kept setting the pace in the industry, providing important crypto services for users. Earlier last month, SBI Liquidity Market, the foreign exchange and derivatives branch of the financial giant, bought Taotao, a crypto exchange.
Yahoo Japan YJFX has a 40% stake in the company before it was bought by SBI.
SBI, a major player in the crypto market
SBI and Ripple have also formed a serious partnership, as the latter builds its financial products on XRP. There are other major partnerships SBI has had with other crypto-based firms, which shows SBI’s serious participation in the crypto market.
SBI said the existing crypto lending programs are open to higher risks such as counterparty facing bankruptcy or faulty smart contract. But the traditional bank approach of the new SBI lending service will offer a less risky option for users, the financial giant pointed out.