Binance is adding Bitcoin Cash, Litecoin, and XRP as collateral options to borrow on its loans platform, the latest move by the largest cryptocurrency exchange to cement its dominant market position. This development also comes just as competition in the crypto lending field is heating up.
Dubbed ‘Binance Loans,’ the influential venue launched the service to allow users to leverage existing crypto assets as collateral for loans. The major venue has originally joined the ranks of other crypto exchanges offering interest-bearing crypto savings accounts in August 2019.
All Binance registered users are eligible to borrow on its loans that cover several cryptos, including BUSD and USDT. Binance Loans also supports a range of varying loan periods, with interest calculated on a daily basis, as well as the use of several coins as collateral, including BTC and ETH.
The lent coins are used in cryptocurrency leveraged borrowing business on Binance.com, which already offers margin trading.
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Binance diversifies its business lines
“Binance Loans will continue to be flexible and actively provide a varying range of options for supported crypto assets, interest rates, collateral assets, and maximum loanable limits based on market conditions and our internal risk management,” the exchange said in a statement.
While loans terms range from 7 to 90 days, borrowers will be given an overdue duration of three days, during which they will be charged three times the regular interest. However, those who fail to repay their loans after the grace period expires will see their collaterals liquidated to pay off crypto debts.
The launch is another move of Binance in its bid to diversify its business lines to attract and retain users. It also comes months after it rolled out margin trading, lending and revealed plans to add futures trading on its platform.
While its staking service is still in its infancy, Binance already allows its users to earn interest on their cryptocurrencies through providing loans to those interested in borrowing digital assets.