Coinbase alerted users that its lending program, Coinbase Borrow, would be terminated. Users will have until May 10, 2023, to use the service. The firm assured users that there will be no impact on their outstanding loans, and no action is required from them at this time.
Coinbase is a popular cryptocurrency exchange platform that allows users to buy, sell, and store various cryptocurrencies. It offers a user-friendly interface, a digital wallet, Coinbase Pro, Coinbase Wallet, and its own layer two blockchain, Base.
Coinbase Borrow is a Coinbase service that allows clients to borrow up to $1 million in fiat loans for up to 30% of their Bitcoin holdings, along with interest. Coinbase noted that the reason behind the shutdown was low demand for the service. Although there has been scrutiny from the SEC on Coinbase for a long period of time.
Coinbase Borrow debuted in November 2021 as a means to rapidly receive fiat loans without having to sell bitcoin, which might result in a taxed gain or loss.
Is Coinbase leaving the US?
Brian Armstrong, the CEO of Coinbase, said in April that the company would consider leaving its headquarters outside the US considering its rift with the SEC. In April, the crypto firm was granted a license to operate in Bermuda by the Bermuda Monetary Authority (BMA). The licensing at Bermuda came in a day after the CEO said they might exit the US.
As Coinbase plans to shut down the borrowing services, it has also made other developments on its platform, including the introduction of Lightning Network into Coinbase, wallet-as-a-service, and the launch of a crypto advocacy campaign.
Regarding these updates, a spokesperson from Coinbase said that the company will continue to evaluate its products and services to give its customers their preferred products and services.