Benzinga | Nov 4, 2021 11:16AM EDT

Coinbase Users Can Borrow $1M With Bitcoin As Collateral And No Credit Checks

Major U.S.-based crypto exchange Coinbase Global Inc (NASDAQ:COIN) will allow users to borrow up to $1 million using their Bitcoin (CRYPTO: BTC) as collateral.

What Happened: Coinbase said eligible users will be able to borrow up to 40% of their Bitcoin balance on the exchange. If a user's Bitcoin balance increases, they will be able to make additional withdrawals from their credit line, so long as the total amount borrowed doesn't exceed that 40%.

Big news for the #BTC set ...

We're excited to announce that eligible customers can now borrow up to $1 Million USD from Coinbase.

Learn more here? https://t.co/3aKzoWkmqP pic.twitter.com/LC3s9ARp3K

-- Coinbase (@coinbase) November 2, 2021

The crypto exchange also stated that it doesn't require credit checks to determine a user's eligibility.

Customers can receive their cash either through their PayPal Holdings Inc (NASDAQ:PYPL) accounts or their own bank accounts.

The loans will be issued at an APR of 8% and customers will be required to pay a minimum of $10 as monthly interest with flexible repayment schedules for the balance.

Coinbase plans to hold the Bitcoin as collateral and doesn't intend to lend out or use it for any other purposes.

Earlier this year, Coinbase abandoned the rollout of its crypto lending product after the SEC threatened legal action against the crypto exchange.

"We had hundreds of thousands of customers from across the country sign up, and we want to thank you all for your interest. We will not stop looking for ways to bring innovative, trusted programs and products to our customers," said Coinbase at the time.

Price Action: Coinbase shares traded down 0.84% lower on Thursday morning at $341.25 per share. Bitcoin was trading at $61,467.57, falling 0.71% in the last 24 hours.

Photo by Jeremy Bezanger on Unsplash