The new centralized crypto exchange BitFinex Borrow was just launched today and now the BTC holders can acquire USDT loans so let’s find out more about it in the latest Tether news.
Bitfinex Borrow will let verified users borrow dollars or USDT tokens against their Bitcoin and Ethereum holdings. The loans will have variable or mixed annual interest rates between 5.5% and 18.5%. The exchange is adding more features despite the ongoing New York state investigation into the relationship with the dollar-pegged stablecoin issuer Tether. Crypto exchange Bitfinex introduced a crypto-backed borrowing service to the platform so now there’s a way for crypto holders to get a loan and avoid selling their crypto assets.
Not allowing the New York state investigation to get into the way of offering new products, Bitfinex announced today the launch of the new borrowing platform which is a peer to peer lending platform, allowing users to borrow either US dollars or dollar-pegged Tether stablecoins against the value of their BTC or ETH holdings on the Bitfinex exchange. Bitfinex Borrow will compete with a growing number of centralized and decentralized crypto lending services like MakerDAO, Aave, Nexo in a digital asset credit market which seems to be growing by the day.
Bitfinex said that the only verified users that will complete the Know Your Customer checks will be allowed to withdraw from the platform where they can choose a fixed variable annual interest rate ranging from about 5.5% to 18.25%. The Hong Kong-based Bitfinex offered short-term loans for margin trading since the launch of 2012 but the exchange will allow now for the first time, withdrawals of currencies to be used elsewhere.
The exchange is the subject of the ongoing New York state investigation because of the allegations that Tether, the dollar-pegged stablecoin provided tokens to the exchange without being compensated with the equal amount of actual US dollar. Tether that shares a number of executives and shareholders with Bitfinex, claimed that all USDT tokens are backed 1:1 by real fiat currency reserves. The company issued billions of stablecoins this year and increased its supply of 12 billion to 17 billion in November.
Loans based on crypto collateral became common over the past few years as the centralized lending service Nexo launched the crypto-backed loans in 2018 and decentralized applications MakerDAO and Aave which offered services like these since 2017. Despite the legal challenges, Bitfinex continued to add more partnerships and features to the platform as they improved support for Bitcoin lightning network transactions.
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