Bitbank, the 16th ranked exchange by 24-hour volume, will now pay you to lend them Bitcoin. Over 75% of their current volume is in Ripple. This is another step in attracting more customers in the ever-competitive cryptocurrency exchange market, where the top exchanges bank more than $1 billion annually.
At the moment, users may only lend bitcoin, but Bitbank will be adding other cryptocurrencies including Ethereum, Ripple, and Litecoin in the coming months. Users must lend at least 1 bitcoin and at most 25 bitcoin, in return for a ~5% interest rate in return. The bitcoin will be locked in for 1 year.
The official statement from Bitbank:
“The cryptocurrency remain locked during the entire loan period. So, the cryptocurrency cannot be sold or transferred. Only when the loan period is elapsed or returned by Bitbank, the customer will be able to sell or transfer the cryptocurrency.”
Bitbank is the 2nd Japanese exchange to offer these services, the first being another fully-licensed Japanese exchange, GMO Coin. GMO Coin allows customers to earn 5% interest in 90 days for bitcoin and 150 days for other coins.
Up to 5 bitcoins, the dividend is 3%, with only a small percent increase for users lending more than 5 bitcoin, and a maximum of 5% in usage fees for amounts exceeding 10 BTC.
In case a lender decides to retract his funds, he stands to lose 5 percent, including related taxes.