Blockchain based banking outfit, Bankera, launched a Loan service on the 21st of July this year, offering a crypto-friendly approach to the lending industry. Bankera Loans, as the new offering is called, enables customers to utilize their digital asset holdings in beneficial transactions by offering a platform where users can put their crypto up as collateral for loans.
The third product in Bankera’s growing list of financial offerings after, cryptocurrency brokerage, Spectrocoin, and digital asset exchange platform, Bankera Exchange. Bankera’s new lending wing offers loans backed by digital currency holding’s at competitive repayment rates, with no repayment schedule (on the condition that the loan be fully paid back by the date the loan matures).
Using the platform, businesses and individuals can get loans from as little as €100 up to €1,000,000 with terms of up to 24 months, by putting up their digital assets as collateral for a loan. At current market rates, one would be required to collateralize a €1,000 loan for 0.1926000 BTC (valued at €2,017 at time of writing). While a €1,000,000 loan would require a collateral amount of 192.7800000 (valued at €2,018,907 Euro.
Bankera probably requires loans to be covered by crypto holdings double the value of the loan to compensate for fluctuations in crypto value. This sensible approach to the loan process benefits the borrower, as the crypto used as collateral still technically belongs to the user while in holding. The user, in a sense, is now able to fulfill an immediate need without having to liquidate any of their digital asset position, as well as pocket the value their collateral may have gained once they’ve made the full repayment, with interest.
The entire loan application process is fully automated, in keeping with Bankera’s mission to become the premier bank of the blockchain era. Once the borrower has keyed in the loan amount they require into Bankera’s user-friendly interface (along with loan term and preferred withdrawal currency), they will have to deposit the chosen digital asset to be used as collateral into a Bankera Loans wallet. Then their loan – in Euros or Digital Assets of equal Euro value – will be automatically deposited into their Bankera Loans wallet, and they’ll be good to go. Bankera has over 6 years’ experience securing user funds, using multi-level encryption through their Spectrocoin offering, so one can be assured of the safety of their funds.
The collateral that the borrowing individual or organization can offer as collateral for a loan on the Bankera Loans system are Bitcoin, Ethereum, the NEM platform’s native token, XEM, as well as privacy coin, DASH. As mentioned before, Ethereum Loans offers an Annual Repayment Rate of 7.5%, which is reduced to 6% if the borrower makes the interest payment in Bankera’s native digital currency, BNK.
“Our solution is made for both businesses and individuals. As the market has been greatly underserved for small-scale crypto holders, we decided to issue loans starting from 100 EUR so that all clients can obtain the financing they need” – Bankera, July 22nd
The latest Bankera offering lends weight to the concept of cryptocurrency and fiat currency-based economic activity coexisting seamlessly by allowing users to access both more conveniently. In terms of use cases, the Bankera Loans offering adds a practical and widely useful, and legally compliant solution for the growing number of cryptocurrency users in Europe. Many jurisdictions around the globe have taken to viewing cryptocurrencies as an emerging asset class, and legally classified them such. So why not be able to use them as such?
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