If you’re into cryptocurrency and you’re looking to save a little money along the way, then perhaps the Gemini Exchange is something you should be checking out right about now.
Gemini Looks to Give Customers a Chance to Make Some Money
The popular cryptocurrency exchange based in New York and brought forth by Cameron and Tyler Winklevoss of “The Social Network” fame has established a new savings account program it’s simply calling “Earn.” The idea is that customers can hold their digital money in interest-bearing accounts so that they can garner a little extra cash each month granted they show loyalty to the exchange and keep their money within the firm.
Customers can earn interest as high as 7.4 percent each year at the time of writing. That’s about 100 times larger than the national average offered by banks in the United States. That figure is somewhere around 0.05 percent.
Noah Perlman – the COO of Gemini – explained in a recent interview with CNBC:
This product is available for all 26 cryptocurrencies that Gemini supports, and it’s the only cryptocurrency exchange that offers the opportunity for users to earn crypto in every state in the U.S., including New York.
Gemini is partnered with a firm known as Genesis Global Capital, a national lender. The idea is that people’s cryptocurrency will be lent out for those looking for some quick cash. Granted they take a while to pay the money back, all who lent their funds out can earn interest over time.
While the system sounds rather positive, there are two big catches that customers should probably consider before getting involved. The first is that their digital money will not be protected by the Federal Deposit Insurance Corporation (FDIC), meaning that if there is ever a problem and their funds disappear, they are not likely to have them replaced.
The second catch is that interest rates are likely to be adjusted over time strictly due to the rate of supply and demand. This could be a good or negative thing. It could be good in the sense that the love and desire of crypto goes up amongst borrowers. Thus, more enter the fray and interest rates could go even higher, ensuring that customers earn more money for whatever they lend out.
However, should that desire or love of crypto ever die out, interest rates could crash, meaning lenders aren’t likely to earn anywhere near as much.
Security Measures in Place
For the lack of FDIC, Gemini has instilled separate security measures to keep everyone’s money protected. Perlman states:
We have security protocols on par with those offered by top financial institutions. We still think that crypto empowers individuals in a way that traditional banks don’t. At the same time, there is a reason why Wall Street and traditional banking has been around this long. It provides lots of safeguards.