Japanese bitcoin exchange Coincheck has resumed registrations for its interest-paying lending service and is now including other cryptocurrencies such as Ethereum, Ripple and Monero, among others, alongside Bitcoin.
Launched in May, the Tokyo-based platform announced ‘Coincheck Lending’, a service that enables users to lend their cryptocurrencies to Coincheck upon agreement of a loan contract. When the agreement expires or is terminated, Coincheck returns the cryptocurrency with an added interest. Annual interest rates vary from 1% over a fortnight to 5% for a year’s deposit into the interest-paying accounts.
At launch, Coincheck enabled the interest-payout service to account holders with bitcoin alone, pointing to support for altcoins in the future. Furthermore, new registrations for these interest accounts were disabled. “We do not accept any new registration temporarily due to the quality assurance of the service,” Coincheck wrote, explaining its decision to disable a service while launching it.
The Japanese exchange has now resumed offering its interest-paying service on Friday, June 16, with registrants required to apply and go through a screening processes before lending to the exchange. The feature now includes all cryptocurrencies supported by the exchange. They are Bitcoin, Ethereum, Ether Classic, Lisk, Factom, Monero, Augur, Ripple, Zcash, NEM, Litecoin and Dash.
However, there are a few notable takeaways from the fine-print. First, Coincheck confirms that the lending service isn’t subject to the Payment Services Act, which would mean that cryptocurrencies deposited into the exchange will not be managed as segregated funds. Deposited funds will not be subject to deposit insurance either.
A more significant disclaimer reads:
To use Coincheck Lending, please note that user must agree with the consumption loan agreement, which is an unsecured contract. Hence, users have a risk not being able to receive lent cryptocurrencies in a case when Coincheck [goes] bankrupt.
Users will also be ‘prohibited from selling or sending lent cryptocurrencies until the end of a term or when Coincheck decides to return it” the exchange added. Presumably, this would mean that the only way users could retrieve their lent cryptocurrency is by terminating the contract, receiving an interest in a prorated basis.
Data over the last 24 hours show Coincheck as the leading Japanese exchange by trading volume, processing over a third of Japan’s bitcoin trades.
Japan is seeing a notable uptick in investor interest and public awareness of cryptocurrencies after legislation in April acknowledged bitcoin and digital currencies as a legal method of payment. Since then, major Japanese retailers have jumped onboard to trial bitcoin payments. The integration of bitcoin into a point-of-sale application could see as many as 260,000 retail stores accepting bitcoin in Japan this year alone. Japan will no longer impose the 8% consumption tax rate on bitcoin buying starting July, a move that could boost adoption further.
The fervor and anticipation of heightened demand have seen a slew of applications filed toward Japan’s financial regulator for licenses to open new bitcoin exchanges in the country. Last month, Japanese budget airline Peach, an international operator, became the first in the country to accept bitcoin for flight tickets. The move will see multiple bitcoin ATMs installed at airports, wherein select stores and outlets will also accept cryptocurrencies for payments.
Featured image from Shutterstock.
Last modified: May 21, 2020 9:45 AM UTC