Blockfi opens interest-bearing savings accounts for cryptocurrencies – Finance Bitcoin News

On March 4, the cryptocurrency-backed USD lending platform Blockfi announced the start of a new savings program called Blockfi Interest Account (BIA). Having started as a private beta service, BIAs are now available to the public who can store Bitcoin Core (BTC) and Ethereum (ETH) and receive 6 percent annual interest paid monthly in cryptocurrency.

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Blockfi introduces a savings account that generates a return on BTC and ETH holdings

The cryptocurrency lending company Blockfi has initiated a new service that offers investors an annual interest in stored cryptocurrencies. With the Blockfi-Zinskonto (BIA) customers can earn 6.2 percent per year by simply saving BTC or ETH in an account. Last July, Blockfi raised $ 52.5 million to get the company rolling with a funding round led by Michael Novogratz’s company Galaxy Digital. In August, the lending company was approved to operate its services in California. According to Blockfi, the newly created BIA savings program was originally launched in private beta and has attracted USD 10 million worth of ETH and BTC from retail, corporate and institutional investors.

“The introduction of BIA is another important step in Blockfi’s goal of becoming the preferred provider of financial services for crypto investors,” said Zac Prince, CEO of Blockfi, on March 4. We are delighted with our relationships and expertise in relation to capital markets to provide benefits and returns on digital assets to all crypto investors. “

Blockfi states that the BIA service is available to customers worldwide and the digital assets are held by the Gemini Trust Company in New York. Gemini recently announced its depot services and completed a SOC 2 Type 1 security compliance review. According to Blockfi, customers pay 6.2 percent per month and they can initiate withdrawals at any time.

“As the crypto markets mature, there is a constant need for more liquidity to keep the markets in order,” said Rene van Kesteren, Blockfi’s Chief Risk Officer. “By providing a transparent rate of return for BTC and ETH, Blockfi will be an important part of the trading and market-making ecosystem.”

Blockfi is joining a few other startups that offer compound crypto returns

Blockfi isn’t the only company offering cryptocurrency investors a return on BTC and ETH. Last August, the Ledgerx exchange, regulated by the US Commodity Futures Trading Commission (CFTC), launched an interest-bearing BTC savings platform. According to Ledgerx, the program enables customers to achieve an annual return of around 16 percent, even if the crypto markets don’t appreciate. Unlike Blockfi, Ledgerx holds the digital assets and a US bank holds the USD accrued interest.

The Ledgerx savings program.

Another San Francisco-based company called Compound has developed a platform that creates a decentralized interest rate market for cryptocurrencies. The compound application uses BAT, ETH and REP in their protocol which runs on the Ethereum network. The startup received $ 8.2 million in seed capital from venture capital firms including Andreessen Horowitz, Polychain Capital, and Bain Capital Ventures.

Flori Marquez, co-founder and VP of Blockfi Operations, believes the startup’s compliance programs set it apart from the competition. The returns generated by BIA clients are generated by Blockfi’s institutional borrowers and participants in the company’s latest fundraiser. Since the launch of Blockfi, Litecoin and GUSD have also been added for crypto-backed loans. “Blockfi’s proprietary risk management system, which automatically initiates margin calls and liquidations to protect our clients’ assets, has had a perfect loss record since it was launched in 2017,” concluded the company’s announcement.

What do you think of Blockfi’s BTC and ETH savings program with an annual share of 6.2 percent? Let us know what you think on this matter in the comments section below.

Photo credit: Shutterstock, Blockfi, and Ledgerx

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BVT, Bitcoin Core, Blockfi, BTC, Compound, Custodian, ETH, Ethereum, Gemini, Interest, LedgerX, Lending, N-Featured, REP, Savings Account, Zac Prince