Update: Cointelegraph has learned that this product has been delayed until October 15th, 2020.
Crypto exchange Bitfinex is now offering a way for holders of three different cryptocurrencies to earn up to 6.2% annual interest.
According to a Sept. 30 announcement, Bitcoin (BTC) and Ether (ETH) holders are now eligible to earn up to 6.2% annual percentage yield, or APY, through a partnership with Celsius Network, while XRP holders can earn up to 4.91% APY. The lending platform, which currently has more than $1 billion in coins from roughly 150,000 users, said it would allow interest on the tokens to be accrued daily, with rewards paid in weekly intervals.
“We expect this offering to appeal to customers that have bought Bitcoin as a long-term store of value, and who also want to earn on their assets while they hold,” said Bitfinex chief technology officer Paolo Ardoino.
The exchange is offering BTC, ETH and XRP holders better APY rates than the average for fiat savings accounts, making Bitfinex competitive, in some respects, with banks. Though many traditional investors still view banks as a less risky venture than crypto, their interest rates rarely exceed 1%–2%. On the other hand, cryptocurrencies frequently fluctuate more in price in a day than the annual interest rate at Bitfinex, so there are swings and roundabouts.
Celsius CEO Alex Mashinsky has often said the lending and borrowing platform’s goal is to “bring 100 million new people into crypto.” Currently, customers can earn up to 15.89% APY on rewards for 12 stablecoins using the platform.
Coinbase launched a similar system for crypto traders to gain 2% APY on their Dai holdings and 0.15% for USD Coin (USDC) holders. The exchange said rewards on both stablecoins offer a means to passively generate income on crypto assets, “with yields on savings accounts and government bonds at record lows.”