BlockFi Opens Interest-Bearing Crypto Accounts to Washington State

New York-based Crypto Lending Crypto Lending The process of lending cryptocurrency assets with an accrued interest rate and due date is known as crypto lending. The process of crypto lending often occurs through cryptocurrency exchanges or online lending platforms to connect borrowers to lenders. Lenders of crypto lending are comprised of institutional lenders, like hedge funds and asset managers, individual participants, or entities seeking to accrue interest. On the opposite end of the spectrum, borrowers of crypto lending include market makers, proprietary traders, investment managers, hedge funds, traders.These entities or individuals look to short the market, arbitrage-based traders, or entities who need to fulfill an obligation with another party. Different Types of Crypto LendingWhile the process of crypto lending is simply, there are four types of crypto lending practices that traders should familiarize themselves with.Companies, individuals, or entities who possess an excess of cryptocurrencies can earn additional cryptocurrencies through crypto lending. Crypto-to-crypto lending materializes in the form of a smart contract, where crypto lenders can earn interest for a specific period. Common cryptocurrencies that are lent include Bitcoin, Ethereum, and Altcoins. Two examples of crypto-to-crypto lending include Nuo and Coincheck. Moreover, margin lending is a new type of crypto lending, which enables lenders to fund varying cryptocurrencies to borrowers as opposed to a single crypto asset. Typically, lenders of margin lending fix their interest rate and contract duration while occurring over a centralized platform such as Nuo and Bitfinex. While less common, crypto-to-fiat lending occurs when individuals, businesses, or entities require cash. Cryptocurrencies are used as collateral while the lender receives a fiat return which generally is credited to a linked bank account. Finally, crypto-credit lending occurs when entities need capital. Opposed to peer-to-peer (P2P) lending, crypto-credit lending places less emphasis on credit history although this comes with a sacrifice of regulation. The process of lending cryptocurrency assets with an accrued interest rate and due date is known as crypto lending. The process of crypto lending often occurs through cryptocurrency exchanges or online lending platforms to connect borrowers to lenders. Lenders of crypto lending are comprised of institutional lenders, like hedge funds and asset managers, individual participants, or entities seeking to accrue interest. On the opposite end of the spectrum, borrowers of crypto lending include market makers, proprietary traders, investment managers, hedge funds, traders.These entities or individuals look to short the market, arbitrage-based traders, or entities who need to fulfill an obligation with another party. Different Types of Crypto LendingWhile the process of crypto lending is simply, there are four types of crypto lending practices that traders should familiarize themselves with.Companies, individuals, or entities who possess an excess of cryptocurrencies can earn additional cryptocurrencies through crypto lending. Crypto-to-crypto lending materializes in the form of a smart contract, where crypto lenders can earn interest for a specific period. Common cryptocurrencies that are lent include Bitcoin, Ethereum, and Altcoins. Two examples of crypto-to-crypto lending include Nuo and Coincheck. Moreover, margin lending is a new type of crypto lending, which enables lenders to fund varying cryptocurrencies to borrowers as opposed to a single crypto asset. Typically, lenders of margin lending fix their interest rate and contract duration while occurring over a centralized platform such as Nuo and Bitfinex. While less common, crypto-to-fiat lending occurs when individuals, businesses, or entities require cash. Cryptocurrencies are used as collateral while the lender receives a fiat return which generally is credited to a linked bank account. Finally, crypto-credit lending occurs when entities need capital. Opposed to peer-to-peer (P2P) lending, crypto-credit lending places less emphasis on credit history although this comes with a sacrifice of regulation. Read this Term platform BlockFi has announced that it has been granted with a Money Transmitter License (MTL) in Washington State.

According to CoinTelegraph, the announcement came in an email sent on December 12.

?If you missed our last announcement, residents of Washington State can now trade and earn crypto interest with a BlockFi Interest Account. Start trading now ?https://t.co/0jhWcAIowm

— BlockFi (@TheRealBlockFi) December 12, 2019

The license grants BlockFi with legal status as one of the first companies that is allowed to offer interest-bearing crypto accounts to Washington state residents. Residents of the state will also have access to BlockFi’s zero-fee Trading Platform Trading Platform In the FX space, a currency trading platform is a software provided by brokers to their respective client base, garnering access as traders in the broader market. Most commonly, this reflects an online interface or mobile app, complete with tools for order processing.Every broker needs one or more trading platforms to accommodate the needs of different clients. Being the backbone of the company’s offering, a trading platform provides clients with quotes, a selection of instruments to trade, real-time updates on quotes, charts and is the main frontend which customers are facing.Brokers either use existing trading platforms and sometimes customize them, or develop their own platform from scratch. Since the beginning of the retail FX trading business MetaQuotes and its platforms MetaTrader 4 (MT4) and MetaTrader 5 (MT5) have been the industry standard, especially when it comes to automated trading.MT4 Shows Resiliency While MT4 has long been seen as ubiquitous amongst brokers’ offerings, a targeted push by MetaQuotes themselves has led to broader adoption of MT5 in recent years. Advanced trading platforms such as MT4 or MT5 also allow access to a wide range of asset classes available for trading.The development of trading platforms over the past decade has failed to successfully dethrone MT4 or MT5, notably in the retail market. However, in institutional markets, brokerage companies and banking entities also construct and utilize proprietary currency trading platforms to help satisfy internal needs with trades executed through institutional trading channels.By far the most important parameter for many retail clients is the optionality and pairs available on trading platforms. Additionally, demand by traders has led to a greater emphasis on newer features such as advanced charting and other tools. In the FX space, a currency trading platform is a software provided by brokers to their respective client base, garnering access as traders in the broader market. Most commonly, this reflects an online interface or mobile app, complete with tools for order processing.Every broker needs one or more trading platforms to accommodate the needs of different clients. Being the backbone of the company’s offering, a trading platform provides clients with quotes, a selection of instruments to trade, real-time updates on quotes, charts and is the main frontend which customers are facing.Brokers either use existing trading platforms and sometimes customize them, or develop their own platform from scratch. Since the beginning of the retail FX trading business MetaQuotes and its platforms MetaTrader 4 (MT4) and MetaTrader 5 (MT5) have been the industry standard, especially when it comes to automated trading.MT4 Shows Resiliency While MT4 has long been seen as ubiquitous amongst brokers’ offerings, a targeted push by MetaQuotes themselves has led to broader adoption of MT5 in recent years. Advanced trading platforms such as MT4 or MT5 also allow access to a wide range of asset classes available for trading.The development of trading platforms over the past decade has failed to successfully dethrone MT4 or MT5, notably in the retail market. However, in institutional markets, brokerage companies and banking entities also construct and utilize proprietary currency trading platforms to help satisfy internal needs with trades executed through institutional trading channels.By far the most important parameter for many retail clients is the optionality and pairs available on trading platforms. Additionally, demand by traders has led to a greater emphasis on newer features such as advanced charting and other tools. Read this Term, which was announced just last week.

?Trade your crypto on BlockFi! ?We just launched BlockFi Trading, a way to easily trade your BTC, ETH, and GUSD while simultaneously earning compound interest paid out in the currency of your choice! No minimum to start ?https://t.co/uXrT7mYPM2

— BlockFi (@TheRealBlockFi) December 5, 2019

Growth & compliance

In the announcement of the trading platform, the company said that it was pursuing other licenses in order to legitimize the platform: “as part of the preparation for the trading launch, BlockFi completed MSB registration with FinCen and has expanded their state licensing strategy to include money transmission licenses in addition to its existing state lending licenses.”

BlockFi will also offer residents of Washington State a fiat on- and off-ramp option.

Zac Prince, CEO and Founder of BlockFi, said that “to date, we have focused on providing products to existing crypto investors that are readily available to investors in other asset classes. With the launch of trading, we are taking a big step in the direction of enabling net new investors to come into the ecosystem.”

Prince also said that “growth of the crypto market overall benefits the entire industry and we’re excited to shift our focus in that direction, in addition to adding products and features that expand the value proposition for our existing clients.”

BlockFi raised $18.3 million in a Series A funding round in August and has raised $79 million in funding rounds to date, according to CrunchBase. According to TechCrunch, the funding round was led by Peter Thiel’s Valar Ventures, with participation from Winklevoss Capital, Morgan Creek Digital, Akuna Capital. Earlier backers Galaxy Digital Ventures and ConsenSys Ventures.

Prince told CoinDesk last week that “‘tens of thousands’ of people are now keeping their crypto with BlockFi, and more than 50 institutional players are borrowing from it.”

DeFi, including crypto lending services, has been identified as a promising trend

Crypto lending and decentralized finance (DeFi) platforms have been recognized as some of the fastest-growing trends in crypto this year.

Indeed, in August of this year, crypto credit assessment startup Graychain found that roughly $4.7 billion has been lent out over the history of the crypto lending sector. At the same time, though, only $86 million has been earned back in interest--a mere 1.8 percent return.