In a move that is expected to change the cryptocurrency market, BlockFi announced on Tuesday that they would be providing new interest earning accounts beginning today. The interest rate is set at 6% annually, which will be broken up and paid monthly in cryptocurrency. The monthly rate will be compounded to actually produce an annual yield rate of 6.2%.
In a statement, BlockFi CEO Zac Prince explained that the lending and borrowing process has always been available, but now his company is offering a service that will “provide utility and yield on digital assets for all crypto investors.”
BlockFi has not only enticed consumers to use their accounts to store their currency, as investors look for a fairly significant return on their investment, but they are using the Gemini Trust Company as the company that will actually be the custodian of the assets.
Gemini is regulated by the New York State Department of Financial Services. The company recently announced that they would be providing insurance coverage for digital assets to meet the SOC 2 Type 1 security compliance required under New York State law.
The combination of the two entities working together not only gives consumers confidence that their assets will be protected from theft but, should a theft occur, there is the added protection of the insurance to restore that which was lost. Add to it the fact that these accounts will earn interest and it is easy to see that BlockFi could quickly become the dominant financial institution in the digital currency world.
BlockFi co-founder Flori Marquez explained, “Our focus on delivering value for our clients and operating with robust compliance programs sets us apart from our competition.” This clearly appears to be the case.
BlockFi had already instituted the program in January, running a beta test for private investors to gauge the success of the operation. Already the company held over $10 million in accounts from retailers, corporations, and institutions.
The new cryptocurrency accounts are expected to support both Ethereum (ETH) and Bitcoin Core (BTC). Those holding accounts with the company would be able to withdraw funds on the account at any time, and the service will be offered globally.
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