Coinbase Unveils Crypto Lending for Institutional Investors

Cryptocurrency exchange Coinbase says it is rolling out a digital asset lending program for its institutional Prime clients.

In an announcement provided to PYMNTS Wednesday (Sept. 6), the company said the service would allow institutions to lend digital assets to Coinbase.

“Coinbase is working to update the financial system that was built over 100 years ago, leveraging crypto to provide people with more economic freedom and opportunity,” a company spokesperson told PYMNTS.

“To advance this purpose, Coinbase is building the most trusted crypto products and services, and supporting other builders to bring 1 billion people into crypto,” the spokesperson said.

The program, the subject of a recent Securities and Exchange Commission (SEC) filing, allows for lending “under standardized terms in a product that qualifies for a Regulation D exemption,” the Coinbase spokesperson said.

The announcement comes a little less than two months after the company said it was shutting down Borrow, a service that lets customers borrow money using bitcoin as collateral.

“We regularly evaluate our products to ensure we’re prioritizing the offerings that our customers care about most,” Coinbase said in the message. “After much consideration, we have made the decision to wind down Coinbase Borrow.”

Coinbase launched Borrow in November 2021, allowing customers to borrow fiat loans of up to $1 million against as much as 30% of their bitcoin holdings. Coinbase CEO Brian Armstrong called the program evidence of the “expanding crypto economy.”

The roll-out of this new lending program is happening amid a busy summer for Coinbase, beginning with the company facing a lawsuit from the SEC.

That suit was part of a larger crackdown by the regulator, which has also filed a series of charges against the world’s largest crypto exchange Binance, and its founder, Changpeng Zhao, alleging the platform “engaged in an extensive web of deception.”

The suit against Coinbase came the following day, with the SEC claiming the company had allowed users to trade unregistered securities. Both companies have said they will fight the charges.

Last week, the company debuted a feature that lets users in Germany and the United Kingdom link their PayPal accounts directly to Coinbase. As PYMNTS wrote, the company plans to extend this option to other EU countries in the coming months.