Business 14 May 2018

Gerald Fenech

Japan’s GMO adds Bitcoin Cash, 3 more cryptos to loan program

Japanese cryptocurrency exchange GMO is continually adding more currencies to its loan program, which allows its customers to loan cryptocurrencies to the company. Originally the program was launched just for BTC, but now GMO has gone further and added Bitcoin Cash (BCH), Ethereum (ETH), Litecoin (LTC), and Ripple (XRP) to the mix.

GMO’s service enables users to rent out virtual currencies so that one can eventually receive a rental fee according to the quantity of lent virtual currency, according to the Japanese cryptocurrency exchange. Interested customers can apply between May 9 and 23 and if there are more applicants than required, the company will use lots to determine whom to borrow from.

Customers can lend between 100 and 1,000 ETH, 50 and 500 BCH, 300 and 3,000 LTC, and between 100,000 and 1,000,000 XRP. Maturity time is 150 days with borrowed cryptocurrencies returned to customers in the original amounts and types at maturity. There is also a complex system of exchange rates for loan interest, which is quite attractive and rounds up to about 5%. Taxes will also be applied to loan fees.

GMO Coin is a licensed cryptocurrency exchange in Japan. Recently, however, the exchange was slapped with a business improvement order from the Japanese Financial Services Agency (FSA), which has been tightening its inspection of crypto exchanges following the much maligned Coincheck hack in January. The other exchange which received a similar order to tighten up its act was Tech Bureau, which operates the Zaif Exchange.

Since the January incident, all cryptocurrencies received a terrible beating declining by 70% in some cases.Recent months have seen a slight recovery with around 30% recovered, although currencies are still way back from their all-time highs.

GMO’s financials are not that rosy either with an operating loss of around $7 million in the first quarter of 2018. Operating costs rose by around $5.1 million when compared with the previous quarter.

Note: Tokens on the Bitcoin Core (SegWit) chain are referenced as BTC coins; tokens on the Bitcoin Cash ABC chain are referenced as BCH, BCH-ABC or BAB coins.

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