Cryptocurrency exchange Coinbase will no longer issue cash loans to users who could offer crypto as collateral, according to emails reportedly sent to customers and shared online.
Coinbase’s Borrow programme let users take loans of up to a million dollars using Bitcoin as collateral. It offered an 8.7% annual percentage rate with no credit check, according to the company’s website.
An email from the exchange shared online by some users noted that no new loans would be authorised via the programme from May 10, and that existing loans would not be affected by this decision.
Coinbase explained that Borrow would allow customers to get cash loans for their daily life needs without being forced to sell their crypto assets, such as Bitcoin.
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Bitcoin (BTC), the largest cryptocurrency by market capitalisation, made records in late 2021 when it shot to an all-time-high that crossed $67,000. However, 2022 saw the coin crashing to prices below $16,000.
Bitcoin was trading at slightly over $29,000 on Thursday and saw a 0.5% price rise in the past week.
