BlockFi Launches Crypto Accounts With Bitcoin, Ethereum Support
Cryptocurrency lending startup BlockFi has launched a crypto deposit account that provides compound interest. The accounts will support Ethereum and Bitcoin bearing 6 percent annual interest paid monthly in crypto,
The company announced the news on Tuesday through a post published on its website. The firm said that BlockFi Interest Account (BIA) is now live and offers customers an annual interest rate of 6 percent, paid on a monthly basis in cryptocurrency. That monthly interest is then compounded to produce a 6.2 percent annual percentage yield or APY.
“It helps crypto investors grow their wealth with one of the most powerful tools in finance – compound interest,” Brad Michelson, director of marketing at BlockFi told CoinDesk.
Account holdings are custodied at the Gemini Trust Company, co-founded by Cameron and Tyler Winklevoss, according to the announcement. Gemini Trust is regulated by the New York Department of Financial Services and also offers insurance coverage for the digital assets it holds in custody.
The executive further said that, as BlockFi’s business also includes providing crypto loans to institutions, it can still afford the interest paid out, even if the prices of bitcoin and ether fall. “We charge more to the institutions borrowing the crypto from BlockFi then we pay to depositors,” Michelson explained.
As Cointelegraph has reported, cryptocurrency lending company Genesis Global Trading reportedly processed $1.114 billion in borrows and lends last year.