How can Crypto Lending innovate the Future of Finance?

Banking CIO Outlook | Friday, September 06, 2019

As Crypto lending trends are perpetually explored by the global market, modern finance lenders and borrowers are rapidly gaining the benefits. 

FREMONT, CA: Crypto lending facilities experience an increase in competition over the past few years. Crypto users and industries are recognizing new opportunities by the platform. It avails both the centralized and decentralized lending network for both lenders and borrowers. The crypto lending market could be relatively small but shows the high potential of gaining users base. From crypto-securing, the lending processes, margin lending on an exchange, crypto-to-crypto borrowing, decentralizing the lending protocols to developing a token-based platform, crypto lending service provides potential income stream with high liquidity and diversity into the sector.  

The opportunities for crypto lending in both centralized and decentralized platform offer unique collateral characteristics to mitigate underlying price volatility. It avails various features, such receiving assets instantly with zero clearing friction, provides efficient storage, and facility to liquidate constantly from market to market. The quick and highly secure platform leads to reduce the cost of underwriting and monitoring to the borrowers and increases the rate of premiums. The higher premium and returns compress the overtime as the entry of new participants.

The platform efficiently explores alternative credit opportunities like custodial lending of cryptocurrencies and non-custodial lending through protocols. The lender benefits the minimized risks with the extended international audience of borrowers. The minimum loan with legal status can strengthen the lending infrastructure and ensure fund security.

Crypto lending can significantly lower the financing cost of competing products. The wide variety in interest rates is offered from both the custodial and non-custodial crypto-secured lenders. For crypto-native business, access to credit can be lent against the predominant assets on the balance sheet to allow more exceptional capital management capabilities. It introduces more stable coins, which enable the possibilities of exchanging tokens at stable rates. The minimum price volatility and minor fluctuation allow borrows to get a crypto-backed loan quickly and more securely. Custody solutions set the standards for crypto lending by delivering clear regulations and providing protection to the crypto assets. It increases the user and organizations trust and attracts new inventors.

 As the cryptocurrency tends to become mainstream, it backs many crypto-backed lending and provides a fast and cheap landing without credit checks. In the crypto economy, secure and forge free transactions get significant advantages with minimum chances of data breaching. The secure platform also enables the flexible lending terms and conditions that can be optimized with both the parties. 

The modern borrows seek cost-effective and efficient ways to manage the lent amount. With the advantages of crypto lending for both lender and borrower, the capital can be used to make investments in real estate, manage travel expense, fund business activity, refinance debt, and borrow against crypto assets with less interest. Crypto lending, the future lending processes disrupts the traditional banking system with its transparency, efficiency, and scrupulous practices.

Crypto lending processes use the smart contract-based system to operate and modify borrows preferences. The new lending trend carries the abilities to compete against protocols that are more efficient by offering durable fiat rails, direct funding to bank accounts, and diversify the product offerings. As financial institutions are widely dominated with the traditional economic framework, the advantages and benefits of next-generation lending technology are yet to explore new possibilities and acceptance across the world.

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