A major Aussie crypto exchange is breaking new ground with an offering that it hopes will entrench the likes of Bitcoin in the financial ecosystem.
An Australian crypto exchange is breaking new ground with an interest rate offering on popular digital assets such as Bitcoin and Ethereum.
Brisbane-based Swyftx on Thursday announced it would become the first locally owned cryptocurrency exchange to offer customers in Australia and New Zealand the ability to receive interest with no fees on a range of digital assets and stablecoins.
The company said it would do this through a new product called Earn, which converts dollars into a variety of digital currencies, including stablecoins, that are designed to avoid volatility by tracking the value of fiat currencies.
There will be 21 different digital assets, including Bitcoin, Ethereum, Cardano, Solana, USDT and USDC, included in the Earn feature, with total inflows to individual coins capped.
Swyftx said different digital assets would attract different levels of interest that reflected the underlying fundamentals of each individual asset, including price volatility.
Popular stablecoins USDC and USDT will attract interest rates of up to 6.7 per cent, with other assets like Bitcoin and Ethereum attracting up to 5.1 per cent.
More volatile assets like Polkadot will fetch a rate of up to 12.7 per cent.
Swyftx is also offering TAUD or TrueAUD, an Australian stablecoin, up to 5.3 per cent and KAVA up to 25.8 per cent.
The Earn feature is an “at call” loan between individual customers and Swyftx, meaning customers will be able to withdraw funds from Earn at any time, with no exit fees or notice period.
The company says this is what sets Earn apart from similar products from global companies such as Crypto.com or Binance.
That said, the Earn feature is not covered by the federal government’s Financial Claim Scheme, which provides protection to deposit holders.
The rates on offer at Earn are also variable, with a seven-day notice period for any changes.
Swyftx chief executive Ryan Parsons believes Earn is likely to mark the start of a period of sustained crypto innovation across Australian financial markets.
“At the moment, you’ve got a lot of me-too-type offerings in the market and that makes it appreciably more difficult for Aussies to diversify their portfolios and achieve their goals,” he said.
“We’re looking at significant pockets of traditional finance and thinking ‘you know what, we can do better than you’.
“We’re proud of the fact we’re able to offer a materially different option to all Aussies, not just current crypto users.”
Swyftx was founded in 2018 by high school friends Alex Harper and Angus Goldman and now has 600,000 customers across the country, up from 220,000 customers this time last year.
Mr Parsons said he expected Swyftx Earn to attract “a broad cross section” of Australians.
Around 25 per cent of adults in the country own, or have owned, cryptocurrency.
“We see Earn as complementing existing options in the retail financial sector,” Mr Parsons said.
“It’s a much-needed alternative for diversification and we’ve worked very hard to make sure it’s secure, flexible and transparent enough to appeal to all Aussies and the full range of risk appetites.”