Coinbase customers can borrow up to $1 million with Bitcoin as collateral

The world's most valuable crypto exchange is now allowing its clients to borrow up to 40% of their Bitcoin value without checking their credit.

Coinbase customers can borrow up to $1 million with Bitcoin as collateral

Coinbase, the world's most valuable crypto exchange, is now allowing its clients to borrow up to 40% of their Bitcoin value without checking their credit.

State-specific borrowing minimums and maximums may vary, Coinbase noted.

Coinbase said the loans will be issued with an 8% annual percentage rate and no credit checks will be required.

PayPal or a bank account can be used by the customers to obtain cash. Coinbase is offering flexible repayment schedules, as well as a minimum $10 interest payment monthly.

According to Coinbase, the collateralized bitcoin will not be loaned or otherwise utilized.

A crypto lending product was dropped by Coinbase earlier this year after the Securities and Exchange Commission raised concerns. Customers were supposed to earn 4% annual percentage yield (APY) on their crypto savings account, a return much higher than most savings accounts at traditional banks.

According to the Block,  the crypto exchange also launched the Coinbase One to a small number of users at first. Coinbase has over 68 million users. Among the new features will be priority phone support and no-fee trading, the Block stated.

According to the spokesperson, "We're always looking for ways to provide our customers with more value. Right now, we are still in an early stage, so everything about the future product will be influenced by feedback from users."

An image posted by the Block shows that the new service will also include additional account protection, which would entitle users to reimbursement of up to $1 million in case of a hack.

Among the first major cryptocurrency exchanges to go public, Coinbase was the first. As soon as it went public via direct listing on Nasdaq in April, its shares tumbled, but they have since recovered. Shares of the company have rallied about 50% since the beginning of October and were at about $339 on Wednesday.