Upbit, Korea’s largest cryptocurrency exchange, has launched a Bitcoin-backed lending service called “Coin Lending.” Users can pledge Bitcoin or Tether (USDT) as collateral to borrow Bitcoin for investment purposes. The service is seen as a step toward expanding the exchange’s business beyond simple trading into a broader financial platform.
According to Upbit, the minimum loan amount is 0.01 BTC, with a maximum loan term of 90 days. Interest rates range from 5% to 12% per year depending on the collateral ratio. A margin call system has been introduced, under which part of the collateral is automatically liquidated if its value falls below a certain threshold. Upbit explained, “Users can freely select their preferred collateral ratio and loan terms, and repay early at any time.”
Industry insiders view the service as a sign of the growing financialization of virtual assets. Bithumb and Coinone are reportedly also considering launching similar collateral-backed loan products. One industry official commented, “Crypto lending can help exchanges diversify revenue and strengthen customer loyalty, but managing the risks of rapid price swings is critical.”
Collateral-backed lending products are already widely offered by global exchanges. Binance and OKX have secured major revenue streams from their lending operations and are expanding the share of institutional clients. In Korea, demand for such services is also expected to grow among institutions and high-net-worth investors.
However, experts caution that lending against highly volatile crypto assets carries significant risk of investor losses. Financial authorities have also announced plans to establish consumer protection guidelines for collateral-based lending. Upbit stated, “To protect users, we will clearly disclose collateral ratios and liquidation rules and strengthen risk warning procedures.”
As Korean exchanges ramp up competition in financial services, the domestic crypto ecosystem is rapidly diversifying. Whether the Coin Lending service will mark the beginning of a broader expansion of the crypto lending market remains to be seen.
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