- Coinbase Borrow is gradually winding down, with customers having until November 20, 2023, to settle outstanding loan balances
- The program launched in November 2021 but new loans ceased in May
- The closure is attributed to a decline in demand in 2022 rather than enforcement action
Coinbase Borrow, the program that enables customers to secure fiat loans against their bitcoin holdings, will be gradually wound down in the coming months. A Coinbase spokesperson revealed that the company’s decision is driven by a strategic focus on prioritizing products that resonate most with their customers, although some believe the news is related to the actions of regulators such as the Securities and Exchange Commission (SEC) cracking down on such practices in the crypto sector. Existing borrowers under the program have until November 20, 2023, to settle any outstanding loan balances.
Coinbase Borrow Won’t See 2nd Birthday
Coinbase Borrow launched in November 2021, allowing customers to secure fiat loans of up to $1 million against 30% of their bitcoin holdings with interest, but in May the company warned that new loans would cease on May 10. This was the first sign that Coinbase Borrow was headed for the dustbin, coming at a time when the SEC was preparing legal action against its exchange operations.
Despite the lawsuits that have followed, the decision to shut down Coinbase Borrow appears, at least for the time being, unrelated to any enforcement action. Instead, its actions have been attributed by representatives to a decline in demand in 2022, probably due to the crypto downturn.
Another Sign of a Move Abroad?
Coinbase has already informed affected loan holders about the closure and is taking additional steps to facilitate a smooth transition. This includes providing a four-month repayment window and granting access to prioritized customer support through their subscription-based product, Coinbase One, which offers various benefits for traders.
The move to discontinue Coinbase Borrow is another example of Coinbase winding down its U.S. operations three months after it said it was considering moving its operational base outside of the U.S. Shortly after this it announced a new operational hub in Bermuda.
