Abic Corporation, an established Japanese corporation, announced on Friday the launch of its Bitcoin loan service, in an announcement that reads “from June 1, we offer loans with virtual currency Bitcoin (BTC) as collateral.”
Abic Corporation was founded in 1973 and is headquartered in Tokyo. It offers a wide range of secured loan products including commercial and real estate loans.
“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 wrote, 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.”
The company explained the significant benefit for Japanese economy from this type of loan saying that “In 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 as high as 55%.”
The company also points out the ability of a customer to have access to funds without having to sell their crypto through these crypto secured loans and urges customers to use its crypto secured loans “for a wide range of purposes such as new virtual currency purchases, [and] tax payments.”
Recently, news.Bitcoin.com reported on Japan’s National Tax Agency revealing that 331 taxpayers with 100 million yen (around US$914,000) or more in miscellaneous income, excluding pension income, declared cryptocurrencies in 2017.
Both individuals and businesses are able to use this service of Abic Corporation. The loan amounts are between 2 million (around US$18,260) and 1 billion yen (around US$9.13 million) with annual interest rates ranging from 2.98% to 15.0%.
The borrowing period is between one month and five years and loans can be repaid in up to 60 installments with no prepayment fee. The delinquency charge is 20% annually.
The company detailed:
“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.”
Additionally, the company assured that while they are holding Bitcoins as collateral, the customers will still receive any forked coins that may split off during that period. “Even if you receive loans with bitcoins as collateral, there is no worry that the right in the division will be lost,” Abic reiterated. According to a previous news.Bitcoin.com report, a group of lawyers is preparing a class action lawsuit against crypto exchanges in Japan that do not grant their customers their forked coins.