A major Japanese corporation has started offering secured loans to its customers against cryptocurrency funds. The company claims to be the first such service in Japan that offers Japanese Yen in loans by securing cryptocurrency funds as collaterals.
Abic Corporation announced on Friday that they will launch a new bitcoin loan service. The announcement read, “From June 1, we offer loans with virtual currency bitcoin (BTC) as collateral.” They wrote, “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 company added further, “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.”
The Tokyo based company, founded in 1973, has been in the secured loans business for more than four decades now. They are primarily involved in providing commercial and real estate loans. The company explained the reason they have added digital currency secured loans to their list of offering, suggesting the complex laws in this space. In Japan, an individual could pay as much as 55% in taxes. “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,” said the company.
Selling cryptocurrency is a loss maker in Japan. The offering could help the users in getting yen against their crypto funds which could then be used “for a wide range of purposes such as new virtual currency purchases, [and] tax payments.” It helps users in getting access to their untapped funds, gain advantage of their investments and never have to pay hefty taxes.
Reports from news.bitcoin.com have claimed that 33 taxpayers in Japan with more than 100 million yen in digital assets have declared their assets in 2017. These funds classify as miscellaneous income sans pension income.
Abic Corporation is offering these loans for both individuals as well as businesses. The amount of loan could vary from 2 million yen to 1 billion yen. Loans will be available for a period of one month to 5 years with a maximum of 60 installments. A 20% delinquency charge is also added to the loans. To attract more customers, the company has declared that it would not take any prepayment fee. The annual interest payable on these loans could range from 2.98% to 15%.
The company added, “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.”
While the company is holding bitcoins as collaterals for the users, it will ensure that users get any forked coins arising in due course of time. It noted, “Even if you receive loans with bitcoins as collateral, there is no worry that the right in division will be lost.”
Recently, some Japanese exchanges had to face the ire of investors who filed a class action lawsuit against them for not providing them the forked coins.