Japanese government-approved cryptocurrency exchange BitBank has just recently launched a new program that involves borrowing bitcoin from registered members with a promise of returns after the loan period.
So far, BitBank is only accepting BTC at a minimum of 1 BTC and maximum of 25 BTC. Other cryptocurrencies are planned to be added to the program later on.
BitBank, one of the 16 licensed crypto exchanges in Japan, explains the program:
‘Virtual Currency Lending’ is a service that allows customers to enter virtual currency lending transactions with BitBank and receive up to 5% virtual currency per year…When we reach the expiration date of one year, we will reimburse by adding the specified usage fee to the virtual currency lent by customers in the month of offering.”
According to the company, BitBank members and account owners can already start using the service. BitBank will be adding ripple (XRP), litecoin (LTC), ether (ETH) and bitcoin cash (BCH) among other cryptocurrencies later on.
The loaned BTC will be locked from sale or transfer for the entire duration of the loan period of 12 months or until BitBank returns it.
A “recruitment month” will also be applied before the start of the loan period.
“The usage fee is calculated by the quantity of the target virtual currency in which the transfer was made within the period for each recruitment month.”
Interest rates are as follows:
- 3% for 1 BTC to < 5 BTC
- 4% for 5 BTC to < 10 BTC
- 5% for 10 BTC above
Cancellation of contract would result to a 5% fee.