Popular crypto exchange has increased its annual interest rate on Bitcoin to 6% and stablecoins to 12%.
In June, Blockchain.com launched a retail option to expand its customer base to smaller investors. The move increased its deposits by nearly $100 million. Now, the exchange is fattening its offer to its new retail customers. The interest rate on Bitcoin deposits has been increased from 4.5% to 6%, while stablecoins (PAX and USDT) have gone from 7% to 12%.
Blockchain.com, like many others, has chosen a juicy interest rate as its strategy for attracting more investors and traders. The move has set the exchange ahead of its major competitors including Celsius and BlockFi who offer annual interest rates under 9%.
Back in March, BlockFi increased its interest rate from 3.6% to 6% on customers holding 5 Bitcoins. With this development, BlockFi will now have to get creative to retain its customers.
According to Blockchain.com CEO Peter Smith, the reason why the company can offer such a juicy return on investment is that it charges its institutional customers a higher rate already. It does so because there is a high demand for its inventory. By so doing, a majority of its profits from institutional customers will be distributed to its retail customers.
Back in March, Blockchain.com .