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Binance Backs Bitcoin Miners to the Tune of US$500 million 

Binance BNB rockets due to Binance Pay

  • Binance Pool, a mining subsidiary of Binance, launched a US$500 million lending project to support the mining industry, which comes as a key time as many miners are struggling to keep their operations above water. 
  • Binance Pool will also launch cloud mining products, directly purchasing the cloud mining hash power from Bitcoin mining and digital infrastructure providers. 

Despite the decentralized nature of blockchain technology, the crash of algorithmic stablecoin TerraUSD and its sister token Luna, and the subsequent string of failures thereafter, have revealed just how interdependent and connected the industry is and continues to be. 

Which is perhaps why Binance, the world’s largest cryptocurrency exchange by trading volume, is stepping in to shore up one of the most heavily battered segments of the industry – the cryptocurrency miners who secure blockchain transactions. 

According to an official blog post, Binance Pool, a mining subsidiary of Binance, launched a US$500 million lending project to support the mining industry, which comes as a key time as many miners are struggling to keep their operations above water. 

Loans will be provided to “blue-chip” Bitcoin miners who could back their bids with physical or digital assets, according to Binance Pool’s blog post. 

Several conditions to access the US$500 million loan fund include an 18-to-24-month term, 5% to 10% interest rates, and some physical or digital assets as security. 

Binance will look at a wide range of metrics, including current performance, mining power and security quantity, to define the borrower’s creditworthiness and the consequent loan-to-value. 

According to Binance, “blue-chip” borrowers must be classified as Binance VIP users and connect at least 500 PH/s to the Binance Pool for a minimum of 24 months after the loan is issued. 

Binance Pool will also launch cloud mining products, directly purchasing the cloud mining hash power from Bitcoin mining and digital infrastructure providers. 

Cryptocurrency mining, especially in the support of proof-of-work blockchains like Bitcoin, are capital intensive and a combination of high energy costs, inflation and a sharp decline in digital asset prices has put pressure on operations. 

In the case of large mining groups in Texas, some miners actually found it more profitable to shutdown operations and sell energy back to the grid. 

Proof-of-work blockchains remain important to the cryptocurrency ecosystem and miners play a significant role in securing blockchain transactions. 

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SuperCryptoNews is a global leading blockchain and crypto news provider, covering daily news on the latest tech and trading developments in crypto. We bring you expansive crypto news coverage especially in Asia, with a focus on Singapore, Thailand and Southeast Asia.

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