Japanese bitcoin exchange Coincheck has launched the country’s first-ever interest paying bitcoin accounts, offering users to earn up to 5% of their bitcoin holdings in interest a year.
Tokyo-based Coincheck, a bitcoin exchange that routinely figures in the top 3 Japanese exchange platforms for bitcoin trading, has launched ‘Coincheck Lending’ this week. Announced by co-founder Yusuke Otsuka in a public tweet, the service incentivizes bitcoin holders to open accounts with the exchange to see interest from their deposits, much like an interest-savings account at a bank.
‘Hundreds of thousands of Japanese are said to have some bitcoin to their names, but many apparently let the currency gather digital dust,” read an excerpt from a report by Japanese financial publication Nikkei.
Notably, however, new user registrations for the interest-paying accounts are currency disabled. “We do not accept any new user registration temporarily due to the quality assurance of the service,” the exchange explained cryptically.
Still, the exchange claims to provide up to maximum of 5% in interest earnings on the Bitcoin deposited in its account.
The interest tiers are as follows:
A closer look at a disclaimer by Coincheck reveals users are held to an ‘unsecured contract.’
Roughly translated, the disclaimer reads:
To use Coincheck Lending, please note that users must agree with the consumption loan agreement, which is an unsecured contract. Hence, users risk not being able to receive deposited cryptocurrencies in a case wherein Coincheck goes bankrupt.
Interest-grown returns are paid to the user’s account when ‘Coincheck returns the deposited cryptocurrency,’ an FAQ reads.
At launch, the interest-payout service is only available for account holders with bitcoin. “Other altcoins such as Ethereum, Ripple, Monero, Factom, Auger will be available to deposit in the near future,” Coincheck added.
The Nikkei report further adds that ‘Coincheck Lending’ is exempt from falling under the purview of banking regulations and the fund settlement law’s recent revisions, with bitcoin not being legal tender, according to the Financial Services Agency. ‘But should the number of users rise suddenly, or the currency gain widespread traction as a method of payment, such services could face regulation in the future’ the report added.
It has to be noted, however, that bitcoin recently gained recognition as a method of payment. Come July, bitcoin buying through exchanges will no longer see the 8% consumption tax rate levied on users. These bitcoin-friendly legislative changes have spurred Japan to become the world’s largest bitcoin trading market in recent months. Up to 260,000 retail storefronts will be enabled to accept bitcoin as payment this year.
Featured image from Shutterstock.
Last modified: May 21, 2020 9:49 AM UTC