Coinbase Prepares Crypto Loan Service For Unstitutional Clients

JAKARTA - Coinbase, a leading crypto trading platform, recently announced its plans to provide crypto loan services specifically for institutional clients in the United States.

The announcement came at the same time as a submission to the US Securities and Exchange Commission (SEC), which revealed that Coinbase had raised 57 million US dollars (Rp874 billion) to support this project.

This loan service is expected to fill the void in the market after several large crypto lenders such as Genesis and BlockFi received attention last year. With this service, Coinbase plans to allow its clients to lend money, especially crypto assets, and use their collateral as collateral that exceeds the loan value.

In this case, Coinbase will operate similar to major broker services commonly offered by banks, which will allow them to provide more secure loans to institutional clients.

However, it is important to note that this loan service is not the same as the Lend program which was canceled in September 2021 after the SEC stated that the product belongs to the securities category. In this case, regulators considered that clients lost control of their assets when placed on the exchange.

In contrast, the newly announced loan service will mainly be aimed at institutional clients, which makes it easier to regulate and comply with applicable regulations.

"With this service, institutions can choose to lend digital assets to Coinbase with standard requirements in products that qualify for the exemption of Regulation D," a Coinbase spokesperson said.

He also stressed Coinbase's vision of modernizing a financial system that is over 100 years old by utilizing crypto technology to provide people with more freedom and economic opportunities.

It is important to remember that Coinbase has submitted an application to the SEC so that they can sell securities within certain limits without having to register officially. This application was submitted through its subsidiaries, Coinbase Credit, Inc., and CFO Coinbase, Alesia Haas, cited as the relevant individuals.

In addition to the failed Lend program, Coinbase has also tried other loan services in the past, such as Coinbase Borrow, which serves retail clients with fiat loans using Bitcoin as collateral. However, the service is currently inactive and no longer offers loans, until now Coinbase borrowers have given time to pay off their debts until November 20, 2023.