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Swiss Bank Dukascopy Launches Crypto Lending Service

Swiss bank Dukascopy introduces crypto lending service, allowing customers to borrow 50% of their crypto’s value in fiat, streamlining the process.

Key Takeaways:

  • Dukascopy Bank introduces crypto lending product.
  • Customers can borrow 50% of their crypto’s value in fiat.
  • The process involves opening a multi-currency bank account.
  • Automated operations include a 0.1 BTC/USD margin position.

Swiss online bank Dukascopy has entered the cryptocurrency lending arena by unveiling a new product that enables its clients to leverage their digital assets for cash without liquidating their crypto holdings.

Under this innovative lending program, customers of Dukascopy Bank can access loans equivalent to 50% of their cryptocurrency’s value in U.S. dollars.

To participate, users need to open a multi-currency bank account (MCA) and transfer the desired cryptocurrency into it. Once completed, they can navigate to the “Investments” section of their account and select the “Crypto lending/borrowing” option.

Dukascopy Bank explained the process further in a press release: “In your MCA account, you will find 50% of your investment market value in fiat.”

Dukascopy Crypto Lending Service

Additionally, customers will be required to sign a “Trading Agreement” and will receive login credentials for a trading sub-account. In this sub-account, they will find another 50% of their crypto’s investment market value in fiat, serving as collateral, along with their crypto investment as an open position.

For instance, if a user transfers 0.1 bitcoin (BTC) into their MCA account, they will receive approximately $1,405 in their bank account and an equivalent amount in fiat on their trading account, based on the current exchange rate.

Dukascopy Bank also initiates a long margin position of 0.1 BTC/USD on the trading sub-account. All these processes are automated for user convenience, with the Swiss financial institution noting a 1% commission for incoming crypto transfers.

This development from Dukascopy Bank, a Swiss Financial Market Supervisory Authority-regulated entity, arrives amid challenging times for the broader cryptocurrency industry and the crypto lending sector.

These sectors are grappling with increasing regulatory scrutiny and prominent insolvencies, such as those witnessed with Celsius and Voyager.

Concluding Thoughts

Dukascopy Bank’s foray into the crypto lending space is a notable move, as it enables customers to unlock liquidity from their cryptocurrency holdings while maintaining their exposure to digital assets.

This innovative offering aligns with the growing trend of traditional financial institutions integrating cryptocurrency services into their portfolios.

Given the increasing interest in cryptocurrency investments and the demand for lending and borrowing options, we may indeed see more traditional banks following suit with similar crypto lending products in the future.

However, they will need to navigate the evolving regulatory landscape and ensure the security of these services to gain the trust of their clients in this emerging financial frontier.