Coinbase Allows Users To Borrow $1 Million Against Staked Ethereum

(MENAFN- Yolo Wire) Cryptocurrency exchange Coinbase Global (NASDAQ: $COIN) is allowing users to borrow up to $1 million U.S. against their staked Ethereum (ETH).

Coinbase says the new borrowing feature enables people to raise cash without having to sell or unstake their Ethereum holdings.

The product, now available to U.S. customers, lets users borrow the USDC (CRYPTO: $USDC) stablecoin against their stake Ethereum held on the Coinbase platform and convert it to dollars.

Staked crypto refers to locking up cryptocurrencies such as Ethereum to help secure a blockchain network, allowing users you to earn rewards for validating transactions.

Analysts say staked crypto is similar to earning interest in a bank account.

Coinbase's new borrowing scheme suggests growing demand for unlocking liquidity held in staked crypto assets.

However, participating in the borrowing plan will require collateral management. Coinbase says borrowers must keep their loan-to-value ratio below 86% to avoid liquidation and penalties.

The ability to borrow against staked Ethereum comes as competition heats up among crypto exchanges and Coinbase tries to attract and retain customers.

Ethereum is currently trading at $2,926.66 U.S., having declined 10% in the past 12 months.

COIN stock has declined 25% over the last year to trade at $223.14 U.S. a share.

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