US-based Blockfi has expanded into India, offering a high rate on its interest-bearing account for two cryptocurrencies. News.Bitcoin.com talked to Blockfi and a local Indian crypto exchange offering a similar program to find out how the two products differ.
Also read: Indian Supreme Court Postpones Crypto Case at Government’s Request
Blockfi Launching in India
New Jersey-based crypto startup Blockfi announced Tuesday that it has expanded service to users in India. Its flagship Blockfi Interest Account (BIA) for BTC and ETH is now available in 65 countries.
“As of this month, over $53 million in client crypto is stored with Blockfi,” the company shared, adding that “We saw a huge amount of demand from India over the last month and we’re excited to welcome their crypto community to our platform.”
A Blockfi representative told news.Bitcoin.com Wednesday:
All of Blockfi’s products will be available to retail and institutions in India. Blockfi have already had clients from India sign up for our services.
Launched in March, BIAs pay interest in cryptocurrency at the beginning of each month. The company explained that it generates interest on assets held in these accounts by lending them to institutional and corporate borrowers.
The account offers 6.2% annual interest compounded monthly for customers with balances of up to and including 25 BTC or 500 ETH. All balances over that limit will earn a tiered rate of 2% interest. The 2% rate was introduced on April 1 due to “unanticipated demand from businesses like crypto hedge funds and VC firms,” the company detailed at the time.
Blockfi CEO Zac Prince confirmed to news.Bitcoin.com Wednesday:
We plan to support additional assets in the interest account but are not able to disclose which ones or specific timing at this point.
Lower Minimum Requirements
Blockfi also announced Tuesday that, starting May 1, the minimum required BTC balance to earn interest will be lowered to 0.5 BTC, with an expectation to lower it further in the near future. Furthermore, the lower balance requirement will be applied retroactively as of April 1 so customers with balances of between 0.5 BTC and 1 BTC this month will be eligible to receive interest at the end of the month.
Deposits of up to 250 ETH will also earn 6.2% APY. However, Blockfi revealed that “Over the past month, demand for borrowing ETH has dropped, and as a result, ETH tier rates will be adjusted in tandem.”
Local Exchange Competing
In comparison, local Indian crypto exchange Coindcx launched a lending program on March 21 that lets users earn up to 2% interest monthly, as news.Bitcoin.com previously reported. Six cryptocurrencies are eligible with more to be added in the near future. The interest rate on deposited BTC is 2%, USDT 1%, BNB 1%, TUSD 1%, XRP 0.75% and ETH 0.75%.
CEO Summit Gupta told news.Bitcoin.com Wednesday that, on his platform, the “annualized interest rate is 26.82% on BTC,” adding that he has seen high interest among users since launch “because the interest rates are good … and users can cancel anytime.”
While Blockfi offers an annual interest rate of 6.2% on BTC, Gupta claims that his exchange offers 24% and requires only 0.01 BTC or 0.01 ETH minimum deposit to earn interest versus Blockfi’s 0.5 BTC and 25 ETH. He further noted that the lock-in period for his exchange is 7 days while it is 1 month for Blockfi, elaborating that withdrawals are also instant on his exchange while Blockfi usually takes 24 hours but could take up to 7 days.
“We use the borrowed funds to provide margin to our Dcxmargin users,” Coindcx explained, noting that while KYC is not required for lending cryptocurrencies, it is for users wanting to withdraw more than 2 BTC per day.
Similar Programs Worldwide
There are similar programs around the globe such as Ledgerx’s Ledgersavings program which currently offers an annualized implied rate of around 16% on BTC. Nexo offers up to 6.5% annual interest on stablecoins. Ethereum-based Compound service offers varying interest rates on users’ BAT, DAI, REP, WETH, and ZRX.
Several regulated crypto exchanges in Japan also have similar programs. GMO Coin started paying up to 5% interest annually on BTC, BCH, ETH, LTC, and XRP in May last year based on the need of the exchange which could change monthly.
Coincheck has a lending program for BTC, paying up to 5% annually. Prior to the January hack, the exchange paid interest on 12 different cryptocurrencies. Bitbank, another regulated Japanese exchange, is paying between 3% to 5% interest annually. While only BTC is currently supported, the exchange plans to add BCH, ETH, LTC, XRP, and MONA to the program.
What do you think of Blockfi’s offering? Would you deposit your crypto in an interest-bearing account? Let us know in the comments section below.
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