Yet another company has decided that the new trend of crypto-backed loans is something worth looking into. BlockFi, founded by Zac Prince, will let borrowers hold onto their assets rather than selling them.
Prince, who is also BlockFi’s CEO, has stated that he believes that many of the traditional lenders neglect the cryptocurrency market. He stated for Bitcoin Magazine that banks work slowly in this regard and that there are a lot of risks involved. He also believes that there is more than enough room in different areas of lending, like student lending or unsecured consumer lending, and that non-bank lenders can use these areas to build successful businesses.
Borrowers with cryptocurrencies can find options within BlockFi
BlockFi’s website states that the company will now provide their users with crypto-backed loans and that their regular interest rate will be 12%, and a loan to value of 35%. Maximum loan duration will be 12 months. Their services will be available in 35 states within the US, and they will work with both companies and individuals.
Prince has stated that the company has already issued both business and consumer loans and that they range from $5,000 to $250,000. Soon enough, Prince expects that the company will announce that they are capable of lending up to $2,500,000.
Origins, development, and future of BlockFi
Prince came up with the idea to start BlockFi after his own difficulties when it came to loaning money via traditional banks. The difficulties mainly appeared due to his choice of an asset, which was Bitcoin. This is not something that banks wanted to approve at the time since they did not acknowledge it as such.
This was mostly since they considered Bitcoin and digital currencies in general as something strongly associated with crime, drugs, and money laundering. Prince, who had a different insight into the potential of cryptos decided that they deserve a chance, and saw the potential in using cryptocurrencies as collateral.
As for the future, BlockFi is planning to expand, and even go international sometime during 2019. Their main goal when it comes to expansion includes Mexico, India, and parts of South America.
Companies like BlockFi are another step towards changing the public’s view when it comes to cryptocurrencies and their legitimization around the world. This won’t happen overnight, of course, and BlockFi is still a new startup, and this is only at the beginning of a long journey.