A move into the world of blockchain payments
The cryptocurrency lending startup called BlockFi has launched a cryptocurrency deposit account that will provide compounded interests with crypto.
Following the announcement of this news on Tuesday, the firm said that the BlockFi Interest Account (BIA) is now live.
The company will offer customers an annual interest rate of 6 percent, which will be paid on a monthly basis in cryptocurrency. This monthly interest will then be compounded to produce a 6.2 percent annual percentage yield or a APY.
According to the Brad Michelson, director of marketing at BlockFi told CoinDesk:
“It helps crypto investors grow their wealth with one of the most powerful tools in finance-compound interest.”
All users of this application will be able to use it from across the globe, while being able to deposit either bitcoin (BTC) and ETH as well. This will allow them to be able to earn interest from offering and withdrawals from funds at any time, according to BlockFi.
The account holdings can become a custodian at the Gemini Trust Company. According to the co-founder, Cameron and Tyler Winklevoss, the Gemini Trust is regulated by the New York
BIA is looking more like the crypto version of a traditional savings account. According to
The executive further explained that:
“As BlockFi’s business also includes providing crypto loans to institutions, it can still afford the interest paid out, even if the prices of bitcoin and ether falls.”
According to Michelson:
“We charge more to the institutions borrowing the crypto from BlockFi than we pay to depositors.”
BIA was first launched in a beta version at the beginning of this year. The firm’s figures show
BlockFi managed to raise over $4 million back in December in a round that was led by Akuna Capital alongside Mike Novogratz’s Galaxy Digital Ventures, Anthony Pompliano’s Morgan Creek Digital and others.
The company also managed to raise $ 52.5 million last year July, in a round that was led by Galaxy Digital. This further secured over $1.55 million early in 2018 with backing from ConsenSys Ventures, along with Sofi and Kenetic Capital.