Major cryptocurrency lending company BlockFi has added support for two new assets to its list of supported digital currencies.
According to a press release shared with Cointelegraph on Jan. 8, the firm has added major altcoin Litecoin (LTC) and USD Coin (USDC) — the dollar-backed stablecoin from major United States-based cryptocurrency exchange Coinbase.
The new additions mean that BlockFi users can now trade and receive loans as well as interest with the aforementioned cryptocurrencies. Clients can earn monthly compounding interest through the BlockFi Interest Account (BIA). USDC carries an annual percentage yield (APY) of 8.6%, while Litecoin’s APY through the BIA is 3.8%.
Interest in crypto loans grows
As cryptocurrency markets continue to mature, new types of services and solutions involving digital assets continue to crop up. Cryptocurrency loans and lending began gaining traction during the 2018 bear market.
Crypto lending has grown more popular for several reasons, including low interest rates, an increase in the number of borrowers and investors for whom receiving crypto immediately is convenient, and a simplified system for borrowers i.e. individuals who did not qualify for a bank loan can still easily receive digital money.
Additionally, crypto lending services allow long term holders of cryptocurrencies another avenue of capitalizing on their holdings, other than the “buy and hold” investment strategy. By offering their assets up for loans, they can receive interest rates that, in some instances, are far higher than those offered in the traditional banking sector.
According to a recent analysis by Cointelegraph, the entire crypto loan industry is estimated to be worth nearly $4.7 billion, with demand for crypto loans rapidly increasing.
In order to meet increasing demand in new jurisdictions, BlockFi recently received a money transmitter license in the U.S. state of Washington.