A prominent Japanese company launches the first service in Japan to accept cryptocurrency as loan collaterals.
“From June 1, we offer loans with virtual currency bitcoin (BTC) as collateral,” read the company’s announcement when Abic Corporation launched its bitcoin loan service.
The company, based in Tokyo, engages in a wide range of secured loan products.
“In Europe and the United States, services that provide ICOs [Initial Coin Offerings] and loans are increasing, with virtual currency as collateral such as bitcoins,”
the firm announced, elaborating:
“Bitcoin secured loan is a service where [customers] can receive loans using bitcoin as collateral as its name implies, but it is Japan’s first service to receive [crypto-secured] loans in Japanese yen.”
One advantage of securing this kind of loan is “in the case of individuals if you sell your own virtual currency, the [capital] gains on that sale will be miscellaneous income and will be subject to progressive taxation,” the firm clarifies the tax can go up to 55%.
Instead of selling their cryptocurrencies, the company encourages customers in securing crypto loans “for a wide range of purposes such as new virtual currency purchases, [and] tax payments.”
Businesses and individuals can get crypto loans from 2 million and 1 billion yen. Annual interest rates ranging from 2.98% to 15.0%. Loan period can from one month to five years, payable in up to 60 installments with 20% annual delinquency fee.
The company explained:
“We will keep your [cryptocurrency] deposit and set the pledge… As a general rule, pledges are set in the virtual currency of the collateral, but it is possible to sell as soon as the market price rises.”