Bybit is the latest crypto platform to offer its consumers an in-house crypto lending service.
The Dubai-based exchange announced the service’s launch on May 2, rewarding customers who deposit crypto through the platform’s new offering of interest incentives. The program promises hourly interest payouts from lending pools, and lenders may deposit and redeem lent cryptocurrency tokens with no lock-up periods.
Meanwhile, Bybit exchange borrowers can take out loans to access funds for various trading options on the platform. Borrowers must deposit collateral assets equivalent to or higher than the loan amount to protect lenders’ investments.
According to a statement issued by Bybit CEO and co-founder Ben Zhou, the crypto exchange intends to provide consumers with a way to convert their cryptocurrency. Advanced traders can access capital from lenders for more advanced trading options on the exchange.
Bybit Joins List of Crypto Lenders
Bybit is the most recent major cryptocurrency exchange to provide cryptocurrency loan services. While only a few major cryptocurrency exchanges provide specialized lending services, the decentralized finance (DeFi) space offers a plethora of opportunities for cryptocurrency users to earn interest on loaned digital assets.
Binance offers a few services that allow customers to earn interest on their bitcoin investments. KuCoin also provides loan services on a broad range of tokens. OKX provides customers with a loan service that allows them to borrow cash against deposited tokens, but it does not allow user lending on its exchange platform.
Following a stern warning from the US Securities and Exchange Commission, cryptocurrency exchange Coinbase has abandoned plans to launch its own lending service in September 2021. The offering was classified a security by the US regulator, with Coinbase guaranteeing 4% yearly returns on USDC deposits.
Kraken also ran afoul of regulatory restrictions in the United States, which resulted in a $30 million settlement with the SEC in February 2023 over the operation of its crypto asset staking-as-a-service business.