Interest BearingCrypto Accounts
Cryptocurrency custodial accounts with a banking twist of interest payments are set to win the trend of 2019, with all kinds of crypto interest schemes making their way, as reported by Bitcoin.com.
With the decline of the cryptocurrency market both in terms of price and volume, previous trends such as initial coin offerings and even airdrops have seen their popularity wane. Instead, crypto users are holding on and waiting patiently for the bull market to return, as many expect it to. Meanwhile, the promise of earning passive returns on crypto holdings is beginning to sound very attractive.
Crypto custodians are taking a leaf out of the banking manual: accept crypto deposits, loan it out to businesses or make forward investments, and share the returns as interest. Some of the returns are considerably lucrative compared to traditional bank savings accounts.
Nexo, for example, last week introduced up to 6.5% annual interest on stablecoins such as Tether (USDT) and True USD (TUSD). Daily compounded interest plus the ability to withdraw any amount at any time means they appear a lot more attractive than more established competitors such as Gemini-backed BlockFi, which recently pegged down interest rates for high-level accounts, or Ledgerx that introduced interest for Bitcoin accounts but imposed restrictions on withdrawals.
Legitimate and regulated Bitcoin investments have not been easy to come by until recent years. While there are plenty of crowd investment opportunities online, such as being part of a crowdfunded casino bankroll, or investing in private businesses, none have offered the same level of customer service and presumed safety nets of regulatory compliant businesses such as Nexo or BlockFi.
Critics of custodial services have pointed out that the very concept of cryptocurrency was to place control and ownership of money in the hands of the user, and that services like these encourage users to once more place their funds in control of centralized entities.
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