One of the things that has been lacking for bitcoin is a savings account.
A crytocurrency wallet is not the equivalent of a savings account in a bank. It just keeps the coins, without giving out any form of interest.
That has now changed as a company by the name of LedgerX has just launched a new financial product: ‘a bitcoin savings account‘.
LedgerX’s new savings account is the first crypto savings account that is regulated by the U.S. Commodities Future Trading Commission (CFTC). The main idea behind the savings account is to provide anyone who plans to buy and hold their coins for a long time interest in the form of fiat currencies.
The difference between just keeping bitcoin in a wallet and in a savings account of this type is the use of a financial technique known as a ‘call overwrite’. The savings account works by having the user select the rate they want to earn, and how much of the bitcoins they have they are willing to earn that yield on. This will then be uploaded to LedgerX’s search engine and the call overwrite process is invoked. The result is that the process becomes a point-and-click affair, making it simple for anyone to use. This allows depositors a greater chance to get a return on their deposit.
Two CTTC Licenses
This particular LedgerX product has two CFTC licenses: a swap execution facility (SEF) license and a derivatives clearing organization (DCO) license. This is a higher level of financial sophistication and indicates multiple levels of options being offered to bitcoin users.
In a statement, Juthica Chao, president of LedgerX, said
Everything we do requires both the licenses. And a lot of that is intentional, because by making it a package deal we can offer a number of services to our customers in a really clear, vertically integrated way
LedgerX’s existing customers will be familiar with the design elements and should find it easy to navigate the new process. Chou expects that the savings account product to attract a lot of customers. This new savings account is expected to be especia lly attractive to those who want to “hodl” their bitcoins rather than just sell them. Being able to earn interest on bitcoins makes it more attractive to keep bitcoins stored away.
This savings account is just another sign that bitcoins users are hungry for ways to place long-term bets on cryptocurrency. The volatility of bitcoin has always made this difficult, but it is that same volatility that continues to attract potential investors.
