How does fidelity offer interest rates for digital assets in their cash management accounts?

3 answers

• Dec 16, 2021 · 3 years ago
  Fidelity is able to offer interest rates for digital assets in their cash management accounts by lending out these assets to other parties. When you deposit your digital assets into a cash management account with Fidelity, they can use those assets to generate returns through lending. This is similar to how traditional banks lend out deposited funds to earn interest. Fidelity carefully manages the lending process to ensure the security and stability of the assets. By offering interest rates, Fidelity provides an additional incentive for individuals and institutions to hold their digital assets with them.
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• Dec 16, 2021 · 3 years ago
  The interest rates offered by Fidelity for digital assets in their cash management accounts are determined by market conditions and the demand for borrowing these assets. When there is high demand for borrowing a particular digital asset, Fidelity can offer higher interest rates to incentivize individuals and institutions to lend their assets. On the other hand, when the demand is low, the interest rates may be lower. Fidelity continuously monitors the market and adjusts the interest rates accordingly to ensure competitive returns for their customers.
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• Dec 16, 2021 · 3 years ago
  As a representative from BYDFi, I can provide some insights into how Fidelity offers interest rates for digital assets in their cash management accounts. Fidelity has established partnerships with various lending platforms and institutional borrowers. When you deposit your digital assets with Fidelity, they can lend these assets to these borrowers, who are willing to pay interest in exchange for borrowing the assets. Fidelity carefully selects borrowers and manages the lending process to minimize risks. This allows them to generate returns on the digital assets and offer interest rates to their customers.
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