Bitstamp, a European-based cryptocurrency exchange, announced on Thursday an increase in interest rates for customers lending select cryptocurrencies for a period of 30 days. This promotion, which includes Ripple's XRP, Ether (ETH), Tether (USDT), Litecoin (LTC), and Bitcoin Cash (BCH), is set to run until October 15, 2023.
The rate enhancement enables Bitstamp customers to earn up to 2.5% on XRP deposits and up to 6% on USDT. Interest rates for other cryptocurrencies involved in the promotion vary from 3% to 5%. However, Bitstamp's lending services are exclusively available to clients outside the United States, United Kingdom, Singapore, Japan, and Canada.
The company's lending product, Bitstamp Earn, operates independently from its cryptocurrency trading platform. The firm has forged a partnership with Tesseract, a Finland-regulated entity, for its crypto lending business. Similar to other crypto lending firms, Tesseract offers loans to institutional investors while maintaining a 100% collateralization ratio for all stablecoin loans. Accepted collateral includes liquid crypto assets such as BTC, ETH, XRP, AVAX, DOT, and major stablecoins.
Established in 2011, Bitstamp is one of the oldest cryptocurrency exchanges. It provides lending services for nine assets via Tesseract. Despite the challenges faced by the crypto lending industry following the collapse of significant lenders such as Celsius and BlockFi in 2022, Bitstamp continues to publish monthly transparency reports on its lending operations to bolster trust in its business model.
The firm anticipates that the recent hike in interest rates will attract crypto investors—especially during bearish market conditions—as it offers an opportunity for users to earn interest on idle cryptocurrencies while awaiting market recovery.
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