Coinbase’s New Strategic Move into Institutional Crypto Lending
Coinbase, a leading cryptocurrency exchange, has rolled out a crypto lending service designed specifically for institutional investors in the United States.
This strategic move is aimed at capitalizing on significant gaps in the crypto lending sector. According to a spokesperson from Coinbase, the exchange has introduced an institutional-grade crypto lending platform for U.S. investors, seamlessly integrated into its existing Prime offering. This development was officially confirmed on September 6 to CoinTelegraph.
“Coinbase is launching a digital asset lending program for its institutional Prime clients,” stated the representative, adding:
“With this service, institutions can opt to lend digital assets to Coinbase under standardized terms in a product that qualifies for a Regulation D exemption.”
As outlined in a submission to the U.S. Securities and Exchange Commission, Customers have already committed $57 million to the lending program, with the initial sale taking place on August 28. By September 1, this offering had piqued the interest of five investors.
This new product aligns with CB’s overarching mission to “update the financial system that was built over 100 years ago, leveraging crypto to provide people with more economic freedom and opportunity,” according to a Coinbase spokesperson.
Coinbase’s latest crypto lending offering follows the suspension of new loan issuance on Coinbase Borrow in May 2023. The program allows users to secure loans of up to $1 million using Bitcoin as collateral. The institutional program operates under Coinbase Credit, the same entity responsible for managing Coinbase Borrow.
This development comes several months after the U.S. SEC accused the company of allegedly offering and selling unregistered securities related to its crypto staking services, which enable users to earn yields by staking their cryptocurrencies on the platform. The company vehemently disputed these allegations, asserting that it strongly disagreed with any characterization of its staking services as securities.
While these legal proceedings were ongoing, The company had to temporarily halt its staking program in four states: California, New Jersey, South Carolina, and Wisconsin.
