Gemini Trust, a New York-based cryptocurrency exchange and custodian, has begun offering a savings account to consumers.
The account, which is called Earn, lets clients move their holdings in bitcoin and other cryptocurrencies into interest-bearing accounts. The current rate is 7.4%.
Gemini, which is regulated by the New York State Department of Financial Services and has a money transmitter license in every state, can afford to pay such high rates because it lends the cryptocurrency to institutional borrowers through its lending partner, Genesis Global Capital.
“There’s high demand for crypto among institutional borrowers,” Noah Perlman, chief operating officer of Gemini, said ahead of the company’s announcement on Tuesday. “This is part of the maturation of the space. You have institutions who need to fund their operations and their own strategies, and as a result they’re willing to pay competitive market rates to borrow.”
The new account is the type of “bridge” product cryptocurrency companies are building to try to disrupt and compete with traditional banks.
“We continue to see the creeping normalization of crypto by tailoring existing banking products to