Cryptocurrency exchange Bybit is the latest major platform to launch an in-house cryptocurrency lending service for users.
The Dubai-based exchange announced the launch of the service on May 2, paying interest to users who deposit cryptocurrencies through the platform's new product. The service is touted to pay hourly interest from a pool of loans, while lenders can deposit and redeem lent crypto tokens with no lock-up period. At the same time, borrowers on the Bybit exchange can obtain funds for various trading options on the platform through loans. Borrowers must provide collateral assets equal to or greater than the loan amount to protect the lender's investment.
In a statement, Bybit CEO and co-founder Ben Zhou outlined the cryptocurrency exchange's intentions to provide users with a way to generate returns. Advanced traders can access funds from lenders and more advanced trading options on exchanges. Bybit is the latest major c cryptocurrency exchange to offer cryptocurrency lending services. Binance offers services that allow users to earn interest on deposited crypto assets. KuCoin also provides lending services for multiple tokens. OKX provides lending facilities for users, enabling them to borrow deposited token funds, but it is not convenient for users to borrow and lend on its trading platform.
US-based cryptocurrency exchange Coinbase has dropped plans to launch its own lending service in September 2021 following a stern warning from the US Securities and Exchange Commission. US Regulators Consider Offering a Security, Coinbase Promises 4% Annual Return on USD Coin deposit.
Kraken also violated US regulatory boundaries, culminating in a $30 million settlement with the SEC in February 2023 over the operation of its crypto asset staking-as-a-service program. While only a handful of major cryptocurrency exchanges offer bespoke lending services, the decentralized finance (DeFi) space offers cryptocurrency users multiple ways to earn interest on digital assets they lend out.
