Brazilian centralized crypto exchanges are starting to offer crypto-based products in Brazil. Mercado Bitcoin, one of the largest cryptocurrency exchanges in the country, has announced a crypto-collateralized loan product that will be paid in national currency to its users. This is the first product of its kind offered by the company, which received a payment institution license from the central bank last year.

To avoid the high risks associated with liquidations, Mercado Bitcoin will limit the loans to 30% of the cryptocurrency users held by users in the exchange. This translates into a credit capacity of over $300 million, given that over $900 million are under exchange custody.

The credits will have an interest rate of 1.39% per month, one of the lowest rates for collateralized loans in Brazil, and only accept bitcoin and ether, the two largest cryptocurrencies by market capitalization. Other cryptocurrencies might be added at a later date.

Mercado Bitcoin stated that it would not liquidate customers’ collateral automatically. The exchange will seek to negotiate the execution and extend the client collateral until 35% if needed on a case-by-case basis, according to its CFO, Andre Gouvinhas.

This flexibility differentiates the platform from its decentralized finance counterparts, which execute liquidate users’ funds obeying smart contract logic. The credit can be used to purchase crypto on the platform. Mercado Bitcoin also allows users to withdraw these loans in national currency for other purposes.

Gouvinhas remarked that this lending product could help users leverage their crypto holdings to get liquidity without selling them. He stated:

With crypto-collateralized lending, we are able to offer greater efficiency and reduced costs to clients. This product allows clients to leverage themselves to take advantage of market opportunities without having to divest their assets.

To follow all the latest developments in crypto and the economy in Latin America, sign up for our Latam Insights newsletter below.

Bitcoin.com News is seeking a News Writer to produce daily content on cryptocurrency, blockchain, and the digital currency ecosystem. If you are interested in becoming a key member of our innovative global team, apply here.

免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。