Japan’s SBI Holdings to Launch Crypto Lending Service via VCTrade

Major Japanese financial services provider SBI Holdings has announced the launch of a new cryptocurrency lending service via its crypto subsidiary VC Trade.

The new service, named simply as VC Trade Lending, will allow customers to earn interest by lending out their cryptocurrency holdings to other crypto enthusiasts for a period of 84 days. Initially the platform will support only Bitcoin (BTC) but SBI Holdings plans on adding other major coins like Ethereum (ETH) and XRP at a later date.

SBI Holdings announced the new service earlier today in a press release posted in Japanese on its official website. The release outlines the conditions related to the new service, including the level of interest users can earn set at the relatively small amount of only 1.0%. Considering the huge gains Bitcoin has been making lately, this seems like a bad choice of investment. However, for those investors with a low level of risk aversion, it promises guaranteed returns rather than the potentially huge losses one could accrue trading cryptocurrencies on the open market.

Following the news earlier this year of lending platform Cred Inc. going bankrupt and failing to pay out its customers, SBI Holdings is aware of the skepticism around crypto lending services. To this end, it has assured customers that all assets are lent to companies within the SBI Group, mitigating any risk of third-party losses. 

Other conditions include a minimum loan amount of 0.1 BTC (approximately AUD$2,600) and a maximum of 5 BTC (approximately AUD$130,000). Users of the VC Trade Lending service won’t be charged any account management or annual membership fees and won’t have to pay for cryptocurrency transfers or deposits made in Japanese Yen. However, there is a small fee charged for withdrawals in Yen.

Expanding Crypto Products

The move follows a prior expansion of its crypto offerings in August this year, when SBI Holdings launched a cryptocurrency derivatives product on its SBI FX Trade platform. The service allowed users to buy and trade CFDs (contracts for difference) with the top three major cryptocurrencies Bitcoin (BTC), Ethereum (ETH), and XRP. 

Each coin was available for trade in pairs with both USD and Japanese Yen, with a high maximum of 500 BTC. However, CFD offerings have come under intense scrutiny lately, particularly in the UK, where local regulator the Financial Conduct Authority (FCA) has called for a ban on the product.

The ease of entry the product provides makes it very attractive to amateur traders who may not know what they are buying into and fall foul to fraud. More often than not, CFDs are presented in a way that makes them difficult to understand and highly risky for the buyer, leading financial regulators to question the ethics of the product.