Binance, one of the world's largest cryptocurrency exchanges by trading volume, has launched a lending business in its bid to attract customer deposits.
The company said in an announcement on Monday that Binance Lending will be available for customer subscription starting from 6:00 UTC on Aug. 28, on a first-come, first-served basis.
Initially, users will be able to lend their U.S. dollar-pegged USDT, ethereum classic (ETC) and Binance's BNB cryptocurrency in order to earn interest, payable from Aug. 29 to Sept. 11.
The annualized interest rate for the initial lending products with a 14-day fixed maturity term, has been set at 15 percent, 10 percent and seven percent, for BNB, USDT, and ETC, respectively.
Binance puts out a total subscription cap of 200,000 BNB, 5 million USDT and 20,000 ETC. If all the initially planned products get fully subscribed, Binance would pay out interests of 1,150 BNB, 19,178 USDT and 53 ETC, which worth about $50,000 as of press time.
Each user's account on Binance will have an initial hard cap for BNB-, USDT- and ETC-denominated lending products at 500 BNB, 1,000,000 USDT, and 1,000 ETC, respectively.
In the meantime, Binance's recently-launched margin trading business charges users who borrow BNB and USDT an annualized interest of as much as 109 percent and 10.0375 percent, respectively.
And just hours before the lending business announcement, Binance said on its website that starting from Aug. 27, it will increase the annualized margin borrow interest rate for ETC from previously 7.3 percent to 14.6 percent.
The company said it will be "constantly evaluating new coins and tokens to support as lending products based on demand" and new products will be revealed weekly on Monday and become available for subscription on Wednesday.
The plan may not be entirely surprising to some given CZ mentioned during a recent London event that the firm was planning to launch a lending business around mid August.
CZ image via CoinDesk archive
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.