After new loan applications were no longer being accepted in May, Coinbase Borrow customers now have until November to repay any outstanding debt.
The lending tool of Coinbase will be phased off over time. A statement on July 20 explained that the choice came after a temporary halt in processing new loan applications that had been in place since May.
Coinbase said, “We will be shutting Coinbase Borrow in stages. No new crypto-backed loans will be issued, and current Coinbase Borrow borrowers have until November 20, 2023, to repay their outstanding balances.
Coinbase Borrow was an integral aspect of the company’s offerings until it was shut down. The service allowed customers to borrow up to $1 million in fiat currency against as much as 40% of their Bitcoin reserves. A charge of 8.7 percent per year was attached to the service.
The main reason behind Coinbase’s decision was the service’s poor adoption rate. However, the precise number of people who would be impacted by this change remains unknown.
To help impacted clients during the transition, Coinbase is making available its premium support service, Coinbase One. According to an email sent out to subscribers, they will be able to view their loan records and Borrow dashboard until May 1, 2024.
A Reddit thread revealed users’ shock at the abrupt conclusion of the program, with some blaming current market circumstances.
As a result of regulatory scrutiny, Coinbase has decided to shut down Coinbase Borrow. In June, Coinbase was hit with SEC charges that it was an unregistered securities exchange and that it had not followed proper procedures in registering the offer and sale of its cryptocurrency staking as a service. Coinbase has not linked the termination of the Borrow program to the SEC accusations.
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