What the internet did to communication and networking, cryptocurrencies have been doing to finance since their inception. The world was treated to a new trading revolution as well, with Bitcoin and the several hundred cryptocurrencies being traded on crypto exchanges globally. Investors around the world have found crypto assets a sound investment decision. But their value extends beyond just trading. Cryptocurrencies, though volatile, offer a decentralized, transparent, and secure interface for a variety of financial uses. The hottest one on the block right now seems to be crypto-backed lending.
Crypto assets and lending
Lending and credit facilities have been traditionally offered by banks and financial institutions globally. The loans so offered:
- have to be backed by collaterals such as stocks, shares, gold, property and others.
- involve considerable formalities and paperwork
- are inflexible and
- accompanied by high-interest rates and penalties in case of non-payment
Courtesy the exciting era we live in, we’re witnessing a digital revolution in lending and payment practices as well. With blockchain tech and cryptocurrencies quickly becoming a popular and widely adopted mode of digital investment, conventional assets and stocks have a competition to deal with. Currently, the total value of the bitcoins in the world stands at $154 billion and that of the bitcoin together with other cryptocurrencies equals to $210 billion. The potential of these crypto-assets lies untapped and unleveraged hugely. There is tremendous scope for credit creation by using these crypto-assets as collaterals to get a (USDT) loan. This Avant-garde concept is becoming fast popular in the crypto circles but still at a nascent stage. Bitcoins and altcoins are fast becoming an alternate option as collateral for obtaining loans.
Unocoin, is India’s First cryptocurrency exchange trusted since 2013, seeks to harness the untapped leverage of Bitcoin. Which is why it’s launched a lending portal offering loans backed by crypto assets to its users. A pioneering name in crypto-trading, Unocoin’s new lending portal will form a quintessential part of its ecosystem helping its users to self-sustain their financial needs backed by their own crypto-assets.
What makes Unocoin lending a win-win deal?
Unocoin intends to grant loans in USDT and in INR to verified users against pledged collateral in bitcoin. USDT is stable coin (1 USDT is pegged to 1 USD) and if the users opt for INR, then it can be withdrawn to their bank account. Bitcoin has regularly outperformed itself with the exception of a few dips in its value and is the most seamless, liquid and universally accepted cryptocurrency. Loans backed by crypto assets powered by Unocoin score over the conventional borrowing routes helping the investors manage their investments, fund their expenses and even plan their tax routines using the customisable and easy-to-obtain loans. Let’s have a look:
- Quick and simple: Unocoin lending’s USP lies in the fact that it is not based on any P2P lending model where the users negotiate the terms of the loan with each other or attempting to utilize a network of brokers. It initiates the loan procedure through a secured dashboard exclusively available to its verified users instantaneously. Once verified, the users need to:
- Go to the lending section and transfer their BTC or enter the amount of USDT required to the lending account.
- The amount so transferred will automatically be used to fill the loan order for a new loan or pay the EMIs of an existing loan.
- The collateral amount (in bitcoins) required to get an x amount of loan in USDT will be greater than the total value of x.
- Customisable and Flexible: Borrowers have the option of paying their loan and interest in easy monthly instalments of 3 to 36 months. They can also go in for the flexible route and customise their own repayment schedule. Unocoin does not posit any restrictions on repayment time under the flexible option. The loans can be secured as a micro-finance by an individual or by a firm to procure funds. In case a borrower pays the loan early, no penalties are charged and the collateral is released immediately to the respective wallet. Multiple loans can be borrowed and kept active at a particular point in time.
- Transparent and secure: Banks and conventional financial institutions often involve hidden charges and high-interest rates, Unocoin lending does not involve any hidden charges. The loan to value ratio is explicitly denoted along with the interest rates once a verified user uses their BTC to be submitted as collateral, or the loan amount in USDT on their personal dashboard. User can enjoy real-time updates and notifications about their current loan status and value of the collateral. Unocoin, assures complete security to the verified user.
- Cost-efficiency and leverage: A crypto asset holder can use their assets to gain loans and enjoy the increase in the value of his assets. Since Unocoin lending involves cryptocurrencies as collateral, the ownership remains intact with the borrower. The user need not sell their holding and enjoy an increase in the value of their holding in future.
- Flexible usage: The loan amount can be withdrawn to be used for multiple purposes such as:
- To diversify the investments further and manage risks
- To trade on securities and cryptocurrencies
- To pay-off daily expenses or fund a vacation
- To close another loan with a higher rate of interest
- To fund a business
- To buy a home
Unocoin lending aims to synthesise the unsought benefits of cryptocurrencies besides trading. Through the simple yet effective interface, it intends to ease up the loan application process by making the users decide their loan amount and terms of repayment given the amount of the collateral. Bitcoin and blockchain, as disruptions in the IoT, initiated a digital revolution. Unocoin lending intends to further the revolution as a mainstream lending phenomenon to be adopted universally. When are you getting started?
P.S: We have a stable coin called TUSD that is being listed on our exchange with its wallet enabling customers to deposit and withdraw it. We will be sunsetting the TUSD on exchange and its deposit on 31st of March 2020. The withdrawals will be suspended by the end of April and our users are requested to withdraw their TUSD tokens before 30th April 2020.