Bitcoin cash users now have another venue to earn interest on their digital asset holdings. Binance has added support for BCH flexible deposits on its lending platform, alongside ETH and EOS. This development comes just as competition in the crypto lending field is heating up.
Binance Adds Bitcoin Cash to Lending Platform
Binance, the popular international cryptocurrency exchange with users from over 180 countries and regions, has announced the expansion of an interest bearing service to its users who hold three additional top cryptos including bitcoin cash. Binance Lending has now added ETH, BCH and EOS to the list of supported digital assets for flexible deposits. These join only BTC, BNB and two stablecoins which were available before.
Lending is a financial product that the exchange provides to its users to lend their idle crypto assets on the platform to Binance Margin, and earn interest for it. Flexible deposits is like a savings account for crypto, with the flexibility to redeem funds without a long term commitment and the simplicity of getting daily interest while margin traders are using your funds.
The individual maximum limit for bitcoin cash on Binance Lending was set to 1,000,000 BCH but the company says it will adjust interest rates and maximum individual limits on flexible deposits based on market and risk factors. From the point of view of the users that can afford to lend such an amount, the risks of holding any large amount on an exchange should also be considered.
Binance is always pretty quick to add support for bitcoin cash to new services it launches after an initial testing phase. In October 2019 it launched BCH trading on the decentralized exchange developed on top of Binance Chain, achieved by listing a token on the DEX which is backed by real bitcoin cash assets.
In December 2019 the company also launched BCH/USDT futures contracts with up to 75x leverage on its Binance Futures trading platform. Bitcoin cash was only the third digital asset made available on Binance’s futures trading platform, strengthening its position in the crypto derivatives market.
Cryptocurrency Lending Race Is Heating Up
The business of lending and borrowing cryptocurrencies, which was previously the domain of specialized ventures, has attracted a lot of attention from new companies such as retail exchanges and wallets.
On March 10, Blockchain.com launched Borrow, a product offering retail users USD-pegged stablecoins against crypto assets held in their wallets. This lending service was made available to users in more than 180 countries. The company also said it will be offering retail users access to the same liquidity pool as institutional investors.
On March 5, custody service provider Bitgo announced that it has begun offering institutional digital asset lending services after a few months of private beta. The lending service was said to be built by a Wall Street team that understands institutional investors’ needs.
That same day, Chinese crypto lending company Babel Finance also provided its outlook on the market in 2020, and noted that “The lending market is increasingly crowded because of the horizontal development strategy adopted by various crypto finance players.” Still, the company’s outstanding loan balance broke a new record high this year, reaching $380 million on February 18, 2020.
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