BlockFi Adds Litecoin, USDC to Its Lending Product Suite
Crypto lending startup BlockFi now supports litecoin and dollar-backed stablecoin USD Coin (USDC) on its platform, enabling users to earn interest on, trade and receive loans backed by the assets.
The initial annual percentage yield on the assets will be 8.6 percent for USDC and 3.78 percent for litecoin.
In 2020, the company aims to add five to 10 new assets including USDC and LTC and is looking most aggressively at the top 20 cryptocurrencies by market capitalization and U.S.-domiciled dollar-backed stablecoins, said Zac Prince, BlockFi’s CEO and founder. USDC is the largest of these stablecoins. The company already supported LTC as collateral for loans and approved of the currency’s liquidity, volatility and overall track record.
BlockFi also plans to develop a mobile app and the ability to send fiat wire transfers in the first quarter of this year. In Q2 2020, it will offer Automated Clearing House (ACH) payment capabilities and in the second half of the year BlockFi plans to launch a credit card that offers rewards in bitcoin.
“Most of the cards that exist now are debit cards or pre-paid cards … for prime consumers in the U.S., the vast majority of spending takes place on credit cards,” said Prince. “This will be a premium credit card that can pass back a bitcoin cashback rate that is attractive with traditional premium cards.”
Prince wouldn’t name the issuing bank for BlockFi’s credit card or which banks would be providing the ACH services, but the startup already works with Silicon Valley Bank, investment bank and brokerage Oppenheimer & Co, Silvergate Bank and Signature Bank.
BlockFi has been providing fiat loans with bitcoin and ether collateral since the beginning of last year. In March, it launched its service offering to pay clients interest on their crypto, which it loaned out to institutions. The company has had to cut rates more than once because borrower supply has not been able to meet depositor demand.
At first, depositors received 6 percent monthly and 6.2 percent in compound interest yearly. In April, the company changed these rules for accounts with more than 25 bitcoin or 500 ether, saying they would get 6 percent monthly only on the part of their holdings below that threshold. In May, the maximum balance for which it will offer 6.2 percent annual interest dropped further to 250 ETH and, later on, to 5 BTC and 200 ETH.
In December, the company made the terms more favorable to users, applying the 6.2 percent rate only to holdings lower than 10 BTC, with everything above that earning 2.2 percent annually. For ether, deposits below 1,000 ETH earn 4.1 percent annually and everything above only 0.5 percent.
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