Coinbase is considering Ethereum collateral amid the expansion of the loan program

Alesia Haas. Source: A video screenshot, Youtube / Coinbase

US-based crypto exchange giant Coinbase could add Ethereum (ETH) as collateral as part of the company’s strategy to expand its lending business in the near future, according to Alesia Haas, Coinbase’s chief financial officer.

Haas spoke during the exchange’s recent Q&A call for the first quarter of 2021 after being asked about Coinbase’s move to increase the Bitcoin Balance (BTC) credit line available to $ 100,000.

In a May 13 letter to shareholders, Coinbase said it has seen “rapid growth in originations” since adding to its BTC-backed credit product with increased credit limits.

“We rate every coin that we lend against for liquidity. Is there enough liquidity on our exchange to liquidate the collateral when we’re under collateralized?

According to the CFO, the company could look to expand collateral to Ethereum in the coming months and quarters.

She noted that Coinbase started its loan program in the fourth quarter of 2020 when a waiting list opened, and the initiative started expanding in the first quarter of this year.

“We are in the early days of our portfolio line of credit and the line of credit / lend products that we hope to be rolling out. So we approach all of our product offerings in a kind of crawl, walk, run style, starting with a small sandbox and continuing to expand and invest, ”said Haas.

In the long term, Coinbase intends to expand the program to several underlying assets of the loans, add more foreign markets and increase the balances it will lend, the executive said.

When asked about the number of crypto assets that Coinbase allows users to play with, Haas admitted that this is “not available for a large number of assets”.

“We’re offering it on four different assets today, but we’re seeing a trend as more of the new cryptocurrencies that are being introduced are being introduced on proof-of-stake per call. When these are introduced, we will offer an increasing number of assets in the future, ”she said.

Regarding staking, the company said in the letter to shareholders that it now has “over a million customers who are making a return by stacking their assets with Coinbase across six different assets.”

“In the first quarter, we announced our plan to offer 6% APR for staked ETH2, an updated version of Ethereum, the crypto-asset with the second highest market capitalization,” the letter said.
Learn more:
– Coinbase says it is targeting more users, not lower fees
– ETH can flip Bitcoin, but it cannot “have its cake and eat it too” – Arthur Hayes

– Sequoia-Backed Onchain Custodian to build a new crypto lending business
– Bitcoin is ‘perfect’ for the global USD 20T collateral market – Research

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