BlockFi, the asset management company for digital currencies, has revealed that it will be supporting the GUSD (gemini dollar) on its platform This is according to posts published on the 29th of May.
New Functionality Not Accessible To US Based Customers
According to the announcement, deposits made in the stablecoin GUSD will be receiving a yield of 6.2% per annum, which will be paid in the same digital currency. The firm also noted that it is also offering dollar funding options in the stablecoin. The firm is also offering GUSD as a collateral from Crypto borrowers in institutions.
Zac Prince, the chief executive at BlockFi has commented saying that the firm now has an opportunity to compete with major financial technology challenger banks through the addition of this functionality. This new level of competition has been made possible by the firm having the opportunity to take advantage of digital assets like Bitcoin for on-ramping in a financial ecosystem that is not only Blockchain based but also dollar based.
The firm has confirmed that these new accounts will not be accessible to customers based in the United States because of the lacking of clarity on regulations with regards to stablecoins pegged on fiat currencies. It however stated that it is in the process of consulting with legal counsel on the possibility of adding this functionality to its US based clients later on in the year.
BlockFi Under Fire For Its Terms And Conditions Reservations
By BlockFi including GUSD as one of its offerings on the platform, it has provided customers who do not reside in the US the opportunity to access debt market that are dollar denominated. This is an opportunity that has been traditionally only been available for multi-national corporations and governments. The firm has registered its excitement at providing its clients across the globe with the utility created by the digital assets ecosystem, without exposing them to the volatility that comes with it.
Some players within the Crypto community have harshly criticised the firm due to its terms and conditions. According to BlockFi’s terms and conditions, it has a right of altering the interest rates applying to any given digital currency every month. This has seen many people claim that it is contrasting with what the firm is advertising. One person that has been vocal about this is David Silver from the Silver Miller Law firm. He has accused the firm of not guaranteeing what it is advertising which causes confusion among its users.
Just two months ago, in March, the firm reduced the interest rates applying to Bitcoin and Ether accounts which are holding above average number of coins. Later on this month, the firm announced that it will be further reducing the interest rates applying to ether accounts on account of the floundering lending environment for the digital token.
Continual Expansion Of The Crypto Lending Space
Just this month, Shinhan Bank unveiled a lending platform that is Blockchain enabled. The bank, which is the oldest in Korea, said that the platform is aimed at speeding the lending process.