Dubai-based cryptocurrency exchange ByBit rolls out cryptocurrency lending service, joining a handful of major exchanges that offer interest-bearing lending facilities.
Cryptocurrency exchange ByBit is the latest major platform to roll out an in-house cryptocurrency lending service for users.
The Dubai-based exchange announced the launch of the service on May 2, delivering interest payouts to users that deposit cryptocurrency through the platform’s new offering. The service is touted to payout hourly interest payments from lending pools, while lenders can deposit and redeem loaned cryptocurrency tokens without lock-up periods.
Meanwhile, borrowers on ByBit’s exchange can take out loans to tap into funds for a variety of trading options on the platform. Borrowers must post an equal or greater amount of collateral assets in relation to the loaned amount to safeguard lenders’ investments.
A statement from ByBit CEO and co-founder Ben Zhou outlined the crypto exchange’s intent to offer users a means to generate returns while advanced traders can access capital from lenders for more advanced trading options on the exchange.
ByBit is the latest major cryptocurrency exchange to offer a cryptocurrency lending service. Binance offers a handful of services that allow users to earn interest on deposited cryptocurrency assets.
KuCoin is another top five cryptocurrency exchange by trading volume that offers a lending service on a wide variety of tokens. OKX offers users a loan facility which enables users to borrow funds on deposited tokens, but it does not facilitate user lending on its exchange platform.
Related: DeFi transforming lending routes on the blockchain
American cryptocurrency exchange Coinbase abandoned plans to launch its own Lend service in Sept. 2021, following a stern warning from the United States Securities and Exchange Commission. The U.S. regulator had deemed the offering a security, with Lend promising returns of 4% per annum on USD Coin (USDC) deposits.
Kraken fell foul of overstepping regulatory boundaries in the U.S., which eventually led to a $30 million settlement with the SEC over the operation of its crypto asset staking-as-a-service program in Feb. 2023.
While just a handful of major cryptocurrency exchanges offer bespoke lending services, the decentralized finance (DeFi) space presents a myriad of avenues for cryptocurrency users to earn interest on loaned digital assets.
Magazine: Powers On… The SEC takes reactionary moves against crypto lending
