The world’s largest cryptocurrency exchange Binance has ventured into lending space, according to an announcement Monday.
The new offering, dubbed “Binance Lending,” allows holders of BNB token, Ethereum classic (ETC) and Tether (USDT) stablecoin earn interest on their funds. The service will be available on a first-come, first-served basis, starting from 6:00am UTC on Aug. 28 to 12:00am UTC on Aug. 29.
Binance said the annualized interest rate for the initial BNB lending product, which has an initial 14-day period, is set at 15%. The maximum cap per account is initially set at 500 BNB and 1,000,000 USDT respectively.
Binance users can decide the number of tokens they want to lend at the time of subscription and will be able to retrieve funds with “guaranteed” interest after the designated subscription period, it added.
“Binance Lending is simple and intuitive to use. Users can subscribe to any lending product and earn interest, it’s as easy as that,” said Changpeng Zhao “CZ”, CEO of Binance. “The interest rate for each product is guaranteed, so your crypto balance will always grow, regardless of how the market moves.”
The new offering will be “constantly” evaluated to add new coins and tokens based on demand and value, the exchange said.
Earlier today, Binance also updated its “Lending FAQ” website page, by adding “Binance Lending Service Agreement,” saying that the new offering will be used in cryptocurrency leveraged borrowing business on Binance.com.
The cryptocurrency lending sector is booming. Earlier this month, crypto credit assessment startup Graychain published a report, saying the sector is currently valued at around $5 billion. However, lenders have earned back only $86 million (or 1.83 percent) in interest.