Japanese company to launch Bitcoin Loan Service
An established Japanese Corporation, Abic Corporation, announced the launch of its Bitcoin loan Service wherein loans will offer Bitcoin (BTC) as collateral. The company claims this is the first service where collateral, for obtaining loans in Japanese yen, will be cryptocurrency.
Abic Corporation is headquartered in Tokyo. It offers varied kind of secured loan products. The company stated that the trend of using digital currency as collateral is already rising in nations like Europe and the United States.
What is the Motive?
The news came up after Japan’s National Tax Agency revealed that 331 taxpayers, having 100 million yen, i.e. US$914,000, or more under the head miscellaneous income, also declared cryptocurrencies in the year 2017. Considering this, the company further added that because of cryptocurrency secured loans, customers can get access to funds without selling their crypto. The benefit is twofold. First, the trend of virtual currency purchases is rising day by day and many platforms have started accepting the use of crypto. Second, the progressive taxation system in Japan indicates that the capital gains on the sale of cryptocurrencies come under the head miscellaneous income and are subject to progressive tax which can be as high as 55%.
The Bitcoin secured loan is available not only to businesses but to individuals too. The interest on such loans varies from 2.98% to 15%. Borrowing period can be from a month to five years and loan can be repaid in maximum 60 installments with no repayment fees. Delinquency charge is set at 20% per annum. The amount can range from 2 million to 1 billion yen.
The Company has assured that customers will still receive any forked coins that may split off during the time their crypto is kept as collateral. So the right in division won’t be lost. Furthermore, the company detailed that pledges are set in the virtual currency of the collateral kept, but it still possible to sell as soon as the market price increases. The company will keep the deposit of customers as cryptocurrency and set the pledge.