Cryptocurrencies are still young, and it’s unlikely that they will become a single option of payment in the near future. Now there is another question — how to correctly include digital assets in the existing economic model and into one’s investment portfolio, in particular.
While figuring out the problem, we have concluded that conventional banks are already growing old and we are going to explain the reason further. Now we’ll just note that they already have competitors with a fundamentally new approach to financial services. And the CoinLoan project is at the forefront here.
Our platform offers an innovative way of integrating cryptocurrencies into the sphere of lending, which makes it possible to earn without selling crypto assets. How is it possible? First things first.
What is the Concept of CoinLoan and Why Crypto-Exchanges Will Not Do
CoinLoan suggests to consider lending issues from a new perspective. Here we do not only involve crypto assets into the process, we also consolidate them with fiat funds. The concept is rather advantageous and understandable — providing fiat loans secured with crypto assets, eliminating the counter-party risk.
Bitcoin, Ethereum, and other top assets draw attention due to large, constantly growing capitalization and high profitability. But, despite the fact that these currencies conquer new peaks, it’s still inconvenient to pay with them in everyday life. So fiat is still a necessity. But it’s hard to leave behind valuable crypto assets that may still go up.
Previously, there was the only one way — to exchange digital money for fiat with the help of exchanges. But here’s the flip side of doing so — the loss of funds on the rate difference, the internal exchange fee and waste of time on waiting for the funds to be credited.
We propose acting more efficiently. Having developed the CoinLoan concept, we studied the way the crypto market was developing. So we asked ourselves: “Why would anyone cash out their crypto assets, if their growth potential hasn’t reached its limit yet?”
This question provided us a rather timely solution. If there is a need for “ordinary” money, you can use the required amount of cryptocurrency as a collateral (of course, considering the LTV ratio) and receive funds almost instantly.
Then you can repay the loan without excessive losses, receiving back your tokens. It’s much faster, more convenient and more profitable than exchanges, isn’t it?
CoinLoan is an international platform, where lenders and borrowers interact directly without intermediaries, determining the lending terms themselves. There is no such offer on the market so the interest here will be much lower. The members of the CoinLoan community can play both roles, acting as lenders for some platform participants and as borrowers for others.
Therefore, all participants will benefit from the open and transparent functionality of CoinLoan. Lenders will be able to earn with significantly lower risks of non-payment of the loan because it will be secured on the registered crypto collateral.
We are responsible for the repayment of the lender’s money even in case of default. In turn, borrowers receive a convenient tool for obtaining fiat funds at a low interest rate without the need to sell their valuable assets.
Digital currencies have not reached the limit of their value yet, so it would be reckless to sell them now, even in case of an important need. CoinLoan aptly solves this dilemma as well as possible — people can save their crypto assets and get the funds for everyday needs.
What’s Wrong With Banks?
As we have already seen, crypto-exchanges are less efficient in storing crypto assets than CoinLoan. Now let’s compare our project with banks — the conventional financial institutions.
Everybody knows that the development of the fintech industry has revealed many problems in the banking sphere. Those include too high banking fees, slow international transactions and other “chronic symptoms”, which make their customers to be desperate for an alternative.
Let’s focus on one of the aspects of the banking business, i.e., lending to prove that nowadays bank become more outdated.
All major banks have similar lending conditions tied to inflation in their respective countries. They may differ in some specific aspects, but the “philosophy” of lending is the same for all financial institutions. So, what do we have?
The Borrower
For any bank the crucial indicator is the borrower’s personality. Usually, the perfect person for lending is a highly educated family man aged from 25 to 45, with a stable official source of income.
And often the gender plays an important role. So women are more likely to get small loans because they are considered to be more responsible and won’t forget to make another repayment. But banks prefer to lend large sums to men as their incomes are usually higher.
For CoinLoan such outdated conventions do not play any role. The identity of the customer, as well as the lender, isn’t important here and requires neither a long verification nor multi-level confirmation. Modern methods of online identification make these processes as fast and safe as possible.
Solvency
Another determinant for banks is the solvency and potential level of the borrower’s income. This information is checked thoroughly. Nobody will receive a loan without it.
In CoinLoan the borrower doesn’t have to prove anything — if you have Bitcoin, Ethereum or Litecoin (these assets will be supported by the platform immediately at launch), it doesn’t matter for us who are you, where you live and what kind of salary you earn. We trust every borrower if s/he places the cryptocollateral. It is better than any certificates that can be forged.
Conditions for Providing a Loan
Banks are known by uncompromising lending conditions. The borrower has to accept all the bank’s terms of repaying the loan, otherwise s/he won’t receive the money. Also banks provide high interest rates and the borrower may face problems with debt collectors.
CoinLoan gives the borrower complete freedom of actions. The borrower himself determines the most acceptable lending conditions and the platform system automatically searches for the most suitable offers from lenders. Why get into “servitude”, if one can find much more acceptable options?
Transaction Speed
Also the bureaucratic slowness of the entire banking system should be mentioned. First, the borrower needs to pull a lot of efforts to collect all the necessary information and certificates. But that’s not all: the bank can also spend much time checking the documentation. Banks take their decisions too slowly, so this is an outdated approach already, especially, if the loan is provided in foreign currency.
In contrast, CoinLoan processes the transactions at once. As it has been mentioned already, after the borrower executes the application, the platform system will automatically seek for a counter offer. If there are suitable options, the applications will be matched without any delay.
You can get fiat money in various ways: to a bank card, via SEPA or SWIFT transfer, etc. So neither the lender nor the borrower will waste their time.
So what can be said as a conclusion? While banks are treading water, cautiously implementing the achievements of the fintech industry, they are quickly losing their hegemony in the financial sector. That’s why we are sure that CoinLoan is quite capable to become one of the leaders of the future world financial and economic system. Сryptocurrencies will become its integral part as wire transfer nowadays.