While cryptocurrency is in a fairly healthy place in terms of its adoption and its prominence on the world stage, many crypto fanatics are adamant that the use of cryptocurrency will replace fiat currency in the future and also that the current banking systems in place will collapse over time to be replaced by one that is more focused on digital currencies. Regardless of the validation of these predictions, it is clear that crypto firms are reaching levels of adoption similar to mainstream financial institutions and in a bid to do this, many are adjusting their business practices to appeal to more consumers and investors alike.
A new you report from Deribit states that many crypto firms are adopting features of traditional banks in order to appeal to consumers.
According to the report, many crypto-related firms and offering interest-bearing accounts, ease of transactions as well as tax services. The report also predicts that in the next two years, these features will be standard for Crypto firms including exchanges and notes a new thing.
An example of this is the returns rate on crypto deposits. Celsius, for example, provides 8.1% APR for cryptocurrency which is much higher than what traditional banks offer. According to the CEO of Celsius, the rise of crypto lending services might make offering high interest rates difficult.
“To boost the yield we wanted to do something other than paying bitcoin on bitcoin, so we’ve decided to pay in our CEL token. We also have a loyalty program with different tiers to show how much interest users will receive. Basically, we are convincing people to join Celsius by paying them more,” Celsius CEO Alex Mashinsky said.
According to the founder of TechCrunch and hedge fund Arrington XRP Capital, Michael Arrington, the rise of crypto lending services as well as a high interest on accounts is helping to drive adoption of the cryptocurrency industry.
“I know of first-time crypto users who are buying stablecoins to get higher interest rates than they normally would be able to with fiat,” he said, adding, “Keep a close eye on crypto-lending companies that are experiencing rapid growth with compelling interest earning rates and low cost loans for crypto and digital dollars, aka stablecoins. We’re seeing growth trajectories in the sector that mirror some of the most successful fintech companies’ like PayPal’s early days.”