Backpack Launches Crypto Lending Feature in Japan with BTC, SOL, USDC

TLDR

• Backpack introduces crypto-backed lending services for Japanese users.
• Japanese users can now borrow crypto and earn yield on BTC, SOL, and USDC.
• Backpack’s lending feature includes auto-lending with a 7-day withdrawal lock.
• The service supports Backpack Points rewards for Japanese crypto users.

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Crypto platform Backpack has launched a new Borrow and Lend feature in Japan, marking the company’s first localized lending offering in the region. This expansion allows Japanese users to borrow and lend crypto assets, including Bitcoin (BTC), Ether (ETH), Solana (SOL), and USD Coin (USDC), without selling their holdings. The new feature aims to provide Japanese users with more flexibility and opportunities to earn yield on their digital assets.

New Lending Options for Japanese Users

Backpack’s latest update enables users in Japan to lend supported cryptocurrencies and earn variable returns. The lending system is designed to offer greater liquidity for users, allowing them to access funds without needing to sell their crypto holdings. This new service lets users lend their digital assets and earn interest, while simultaneously offering the option to use these assets as collateral for borrowing USDC.

Backpack positioned this offering as a way for users to benefit from their crypto assets without needing to sell. The launch of this lending feature also integrates Backpack Points, a rewards system previously unavailable to Japanese users. Now, Japanese crypto enthusiasts can earn rewards through the Backpack Points program when participating in the new lending service.

Auto-Lending and Withdrawal Rules Explained

Backpack’s lending model is automatic, meaning that once a user deposits a supported asset, it is immediately lent out for a seven-day period. Interest begins to accumulate from the moment of deposit. However, there is a key restriction that users should note: the deposited assets cannot be withdrawn during the seven-day lending period. If additional assets of the same type are deposited, the loan term resets, and the withdrawal lock extends accordingly.

This auto-lending feature does not require any manual configuration from users. It is always active once an asset is deposited, and the interest continues to accrue. However, the platform advises users to understand that yields may fluctuate depending on market conditions.

Liquidation Risk and Other Considerations

Despite the flexibility offered by Backpack’s new lending services, the platform has issued warnings about the risks associated with crypto-backed borrowing. Users who borrow funds against their crypto assets face liquidation risk. If the value of the collateral decreases significantly, the platform may liquidate assets to cover the loan. Backpack has urged users to fully understand these risks before using the Borrow and Lend feature.

Additionally, Backpack clarified that this launch only includes the borrowing and lending service, without any spot or derivative trading. The company’s strategy appears to focus on a phased rollout, with further services likely to be introduced as the platform gains more experience and the regulatory environment in Japan continues to evolve.

Backpack’s Strategy in Japan

Japan is known for its strict crypto regulatory framework, and the launch of Backpack’s crypto lending service signals the company’s commitment to compliance in this market. The move aligns with a broader trend where demand for yield-based crypto products is growing among Japanese users. By focusing on capital efficiency and long-term holding, Backpack aims to cater to a more conservative segment of crypto users who seek financial flexibility without the need to sell their assets.

As the regulatory landscape for cryptocurrencies becomes clearer in Japan, Backpack may introduce additional services. For now, the company is taking a measured approach, ensuring that its offerings meet local regulatory standards while providing users with practical tools for managing their digital assets.

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