The popular cryptocurrency exchange Coinbase will stop offering its Borrow program starting May 10, 2023. The service enabled users to borrow cash against their bitcoin holdings as collateral. However, the company sent out an email to customers on Wednesday stating that the program would no longer be available to new users, and there would be no impact on the outstanding loans, which would continue as usual. The message also stated that customers would continue to have access to their loan history and the full Borrow dashboard.
Coinbase had unveiled the Borrow program in August 2020 and launched it publicly in November 2021, with the service allowing eligible customers in select U.S. states to borrow up to USD 1 million from Coinbase using bitcoin as collateral. The interest rate was a variable annual percentage rate (APR) of 8.7%, which was lower than rates charged by traditional lenders. The program offered an alternative to selling bitcoin when users needed cash, thus avoiding incurring taxable gains or losses.
However, it seems the crypto exchange has decided to shut down the program for undisclosed reasons. In the email, the company did not provide any explanation for the decision. This move is not surprising as Coinbase is trying to focus on its core business of cryptocurrency trading, which has seen significant growth in the last few years. The company’s revenue grew to USD 1.8 billion in 2021, almost double the previous year’s revenue.