Posted on

Ripio Rolls Out Crypto-Powered Loans Across Latin America

Here’s something you don’t see every day: an ICO that has actually led to a shipped, working financial product.

Revealed exclusively to CoinDesk, Argentinian startup Ripio is making peer-to-peer microloans available today to all its 200,000 bitcoin wallet users in Argentina, Mexico, and Brazil. The Buenos Aires-based company raised $37 million in an initial coin offering (ICO) last year to build the Ripio Credit Network, which matches individual lenders and borrowers across the globe through ethereum smart contracts.

Today’s full rollout of that marketplace follows a closed beta in which more than 800 loans were facilitated to customers in Argentina. Ripio said it now has 3,000 lenders on the network, many of them located in Asia, issuing loans for up to $730, though so far the average loan size is $146.

Ripio CEO Sebastian Serrano told CoinDesk:

We have people from Asia funding people in South America, which is something you cannot do with another [app].”

Previously known as Bitpagos, Ripio is one of the longest-running startups in the crypto space, with well-established merchant processing, exchange and wallet services. It entered the credit business in 2016, lending its own funds to consumers in Argentina, before pursuing this more ambitious vision for global p2p lending.

While the borrowers receive their loans in fiat, the new network is powered by an ethereum-based token called RCN. Lenders send the funds in RCN, a cut of the tokens goes to third parties involved in the lending process – such as identity verifiers, credit scorers and co-signers of the loans – and Ripio (and, potentially, other wallet providers) converts the RCN to fiat before disbursing the money to the borrower.

Unlike most exchanges and mobile lending services, Ripio’s offerings are available to unbanked crypto users. This is essential for Latin American markets where people have diverse but overwhelmingly complicated histories with the banking industry. For example, according to World Bank statistics from 2017, around 30 percent of adults in Brazil are unbanked, compared to 54 percent in Colombia.

Although the startup doesn’t have data on how many unbanked users are on its platform, a survey of 1,000 Ripio users revealed 19 percent didn’t have a credit card. They often fund their wallets by depositing cash at convenience stores that partner with Ripio.

With the credit network, however, they now have a way to build a track record of repaying debts, which could help them obtain financial services in the future. Further, “the entire lifecycle of the credit and the loan” is contained in the smart contract on the blockchain, Serrano said.

“It gives the user credit history. Even if the marketplace disappears the code will continue to execute,” he said.

To make credit histories recorded in smart contracts widely useful, Ripio has proposed a standardized way to present claims about an identity (e.g. “Joe made all his car loan payments on time”) on ethereum. Serrano explained:

“In order for it to work across products and networks, ethereum needs to get a standard for identity claims so that every project uses one or two claim standards, kind of like we have ERC-20 [for tokens].”

Cross-border markets

Over the next year, Ripio plans to expand services to Chile, Colombia, and Uruguay.

“Every market has these different characteristics, regulations, things you have to comply with,” Serrano told CoinDesk, “Things you have to do to make it easy for users to deposit cash.”

Political instability can create roadblocks, however. For example, Ripio once operated in Venezuela and still maintains staff there, but security concerns and opaque regulations forced the startup to halt operations.

“We hope to extend service there as soon as this madness ends,” Serrano said. “It’s become very, very difficult to maintain operations in Venezuela, legally.”

In order to expand, Ripio is looking for more fiat-centric partnerships like the ones it established in Brazil with Neon Bank and Banrisul. Since users are handing over cash, Ripio needs banks for storage. Plus, expanding such partnerships in each nation could provide crucial liquidity.

Santiago Siri, the Argentinian founder of a blockchain governance project called Democracy Earth, told CoinDesk that Ripio’s partnerships are already making an impact across the continent.

For example, through its partnership with the e-commerce giant Mercado Libre, shoppers and sellers can transfer funds between their e-commerce accounts and Ripio wallets, offering new avenues for people to earn or spend crypto.

“Large populations in countries like Brazil and Mexico are unbanked,” Siri said. “So companies like Mercado Libre have to find ways to do business without credit cards. Ripio has been leading this, allowing people to do payments [indirectly] with bitcoin.”

Serrano said 15 percent of Ripio wallets’ transaction volume, millions of dollars per month, now comes from Mercado Libre. Rosine Kadamani, the founder of the educational Blockchain Academy in Brazil, praised this partnership with the largest e-commerce platform in the region, as well as Ripio’s crypto-powered loans, saying:

“When we’re trying to get people in the crypto space, it’s a good strategy to reach people where they are already comfortable… Why not provide a space for peer-to-peer loans? I see no reason at all for credit to be monopolized by banks.”

Speaking to the demand for such cross-border conduits, Siri added: “Latin America is a very fertile region for the deployment of cryptocurrency infrastructures.”

Sebastian Serrano image courtesy of Ripio

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

Posted on

Crypto-Backed Loan Provider SALT Expands to 35 US States

Cryptocurrency-backed loan provider SALT Lending announced it has expanded into 20 new U.S. states on Wednesday.

The firm, which allows users to borrow cash against their cryptocurrency holdings, is now available in 35 states, including Washington D.C.

Also revealed today is a new tech platform for SALT clients, which the firm says includes updated tools for borrowing funds and faster transactions, as well as a new member loyalty program.

The firm’s chief executive, Bill Sinclair, who took up his post last month, told CoinDesk that the process of expanding to new states is complicated, and that the company’s legal team has been working with regulatory experts to ensure that the loans it provides fall within each state’s individual laws.

“SALT loans are and will be structured within the laws, regulations, and guidelines provided by each jurisdiction in which the loan is offered,” he said.

As such, the platform is newly available to residents of Connecticut, Florida, Illinois, Kansas, Texas, Maryland, Michigan, Wisconsin and Maine, among others.

The company is currently moving its current users to the new platform, Sinclair said, adding that, for the rebuild, “we started with some key community leaders and worked their feedback into the nuances of our technology.”

“The first borrowers to get loans in the new system were those who previously applied in areas in which we were not approved to lend and were still interested in a SALT loan,” he said.

To further attract new members and retain existing clients, the startup today also unveiled a new member loyalty program. Called Proof of Access, the scheme lets customers modify their loan conditions using the firm’s own token (also called SALT), according to Sinclair

New clients become members by depositing at least one SALT token onto the company’s platform, and can then stake their tokens to adjust their loan interest rates.

Sinclair said the firm plans to continue developing its platform, and in the future plans to introduce micro-loans and qualified custody products, alongside international expansion.

SALT will also be looking at adding new blockchain tokens to be used as collateral, he said, explaining:

“As blockchain assets continue to grow in abundance and popularity, technology will need to pivot accordingly. … Opening doors for our potential borrowers who may have selected different investments than bitcoin and ethereum will be a key differentiator for SALT in the future.”

Salt mounds image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

Posted on

Banking Giant Trials Blockchain for Issuance of Land-Backed Loans

The Agricultural Bank of China (ABC), one of the world’s largest banks by total assets, has completed the issuance of a loan worth $300,000 using a blockchain system.

The bank tested the technology for the first time in one of its branches in China’s Guizhou province which issued a loan backed by a piece of agricultural land as collateral, a local financial news source reported on Tuesday.

The ABC said the blockchain system is deployed among various nodes to facilitate the loan issuance including other commercial banks, the provincial branch of the People’s Bank of China as well as the local government’s Land and Resources Bureau.

By having a distributed ledger to keep parties updated with the data of borrowers and their collateral, the bank said the tamper-proof blockchain can streamline the manual process of approving loans and eliminate the problem of double spending – borrowers using the same piece of agricultural land as collateral to apply for loans from different banks.

The blockchain application is part of the bank’s effort to bring wider access to loans for farmers and businesses who own agricultural land in rural China.

Following the initial testing result, the ABC aims to further expand the application to issuing loans that are backed by other types of assets such as real estate properties in the future.

Listed in both mainland China and Hong Kong with a total asset of $3 trillion as of December 2017, the ABC is one of the “Big Four” state-owned commercial banks in China and also the fourth largest bank in the world by total asset.

Currently, out of the 26 publicly-listed banks from China, 12 of them have already started working on blockchain technology.

The ABC’s annual filing disclosed early this year shows the state-owned entity has also developed a decentralized network to issue unsecured loans in smaller amounts via an automated process for agricultural e-commerce merchants.

ABC image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

Posted on

Novogratz’s Galaxy Digital Leads $52.5 Mln Fundraising Round for Crypto-Lending Firm

Crypto-focused merchant bank Galaxy Digital has recently led a $52.5 million fundraising round for crypto-lending firm BlockFi, according a blog post by the company July 24.

Galaxy Digital CEO and founder Mike Novogratz confirmed in a tweet that he is, “excited to get into the crypto lending business.” With the new round of investment, the startup will reportedly be able to expand its business outside the U.S. and to support more cryptocurrencies.

BlockFi, featuring “loans backed by your cryptoassets,” offers corporate and retail loans on their digital asset holdings. BlockFi currently offers loans on Bitcoin (BTC) and Ethereum (ETH).

The New York-based firm was launched in January 2018 by Zac Prince, a former senior vice president of lease payments operator Cognical, according to Business Insider. BlockFi raised money in two rounds this year, receiving $1.55 million from ConsenSys Ventures, SoFi, and Kenetic Capital in February.

Prince stated that the recent investment by Novogratz is a “strategic step towards BlockFi delivering credit across the crypto ecosystem,” stressing the company has faced a high demand on crypto-lending services.

“The support we’ve seen from existing clients and investors highlight the strong demand for leveraging Bitcoin or Ether for low-cost USD loans. We look forward to expanding our services to support more cryptocurrencies and more geographic markets in the near future.”

Last week, Novogratz predicted that mass adoption of crypto and blockchain is “still five to six years away.” The Wall Street exec said that more institutions will enter the industry “in the next two to three years,” claiming that “without that, we will be running in circles.”

Posted on

BBVA Signs $117 Mln Blockchain-Powered Corporate Loan

Banco Bilbao Vizcaya Argentaria (BBVA) has signed a new blockchain-based loan with civil engineering firm ACS Group, according to the BBVA’s official statement July 19.

BBVA, a multinational Spanish banking group, signed an agreement with ACS to provide a long-term bilateral corporate loan of €100 million ($117 million).

The new blockchain-powered loan contract will reportedly boost the efficiency in financial processes of the company, allowing for better transparency and traceability of contractual process.

Settling the loan on a blockchain allows both parties to independently monitor the stages of a contract, as well as the conditions. The pilot also includes digitization of the negotiating process with the management time expected to be reduced “from days to hours.”

In April, 2018, BBVA successfully carried out “the first global corporate loan transaction ” using blockchain technology with a Spanish information technology Indra.

Last month, the BBVA reported that it signed another blockchain-based agreement with one of the leading global oil and gas industry companies Repsol to renew a credit line worth €325 million ($377 million), which is reportedly the first application of blockchain technology in the sphere of corporate finance.

While the company is actively embracing blockchain technology, also applying distributed ledger technology (DLT) in processing and handling shipping document submissions, BBVA CEO Carlos Torres recently claimed that blockchain is “not mature” and faces major issues. Torres added that, despite its contemporary challenges, “when it is mature and regulators are ready,” BBVA wants to have the tools necessary to apply the technology to relevant use cases.

Posted on

Bank of Queensland Rules Out Crypto Purchases With Mortgage Funds

An Australian retail bank has revised its contract terms to prohibit borrowers from using loans such as mortgages to purchase cryptocurrency.

According a report from Australia Finance Review on Thursday, Bank of Queensland, which is publicly traded on Australia’s stock exchange and one of the country’s oldest retail banks, has confirmed the change of the loan agreements, which now state that “any loan purpose that involves the acquisition of or usage of cryptocurrency is unacceptable”.

The move is the result of concerns over recent price volatility of the cryptocurrency market, as well as Australian regulators’ increasing scrutiny over the nascent space, the report said.

As previously reported by CoinDesk, Austrac, the country’s financial intelligence agency, announced a new rule mandating know-your-customer measures across crypto exchanges in April of this year. The Australia Taxation Office has also been seeking public feedback on how should best tax profits made from cryptocurrency trading.

Bank of Queensland’s decision also comes as most other lenders in Australia are discouraging borrowers from using real-estate mortgages to make high-risk investments.

Citing an anonymous broker in the industry, the report said lenders in the country are currently monitoring borrowers’ accounts for signs funds are being used to trade or purchase cryptocurrencies.

“They are concerned because the Australian Taxation Office, Treasury, the Reserve Bank of Australia and Austrac are crawling all over it,” the broker was quoted as saying.

More widely, major banks globally – including JP Morgan Chase, Citi and Bank of America – have recently moved to ban users from using credit lines to purchase cryptocurrency over fears that a volatile market could leave borrowers unable to repay their debts.

Contract signing image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

Posted on

Chinese Banks to Put Credit Blacklist on a Shared Blockchain

The banking arm of Chinese retail giant Suning is testing a consortium blockchain that would allow participating banks to record and update a shared ledger of users with bad credit scores.

According to a local news source Sina Finance on Thursday, Suning Bank developed the blockchain system in order to move its blacklist of suspect borrowers to a distributed database in an effort to allow collaboration with other banks on preventing credit fraud.

Using the system, each participating institution becomes a node of the blockchain that can access the original blacklist shared by Suning Bank. Node institutions can further update the list with their own data, the report indicates.

Founded by Suning in 2017, Suning Bank is one of the first online-to-offline commercial banks in China, launched by established private companies to provide loans to small and medium businesses.

The move to share data on users’ trustworthiness is the latest by the financial institution to utilize blockchain technology in managing its credit systems.

In September of last year, Suning Bank joined another blockchain consortium created by two other private commercial banks – CITIC and Minsheng – which uses a blockchain system to record transactions of domestic letters of credit.

In March, CITIC touted in its annual financial filing that the platform has already facilitated transactions worth a total of $156 million.

Suning image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

Posted on

Roger Ver and Mate Tokay from Bitcoin.com Join a New Fintech Startup Advisory Board

Bitcoin.com’s CEO Roger Ver and COO Mate Tokay have become advisors to a fintech startup MoneyToken, as reported in MoneyToken’s announcement. The partnership between MoneyToken and Bitcoin.com may bring new benefits to the Bitcoin Cash (BCH) community, as BCH will be available as accepted collateral on the MoneyToken lending platform, says the joint press release.

According to Bitcoin.com, Roger Ver is also an advocate of Bitcoin Cash and one of the key influencers in the crypto community because of his early investments – since 2011 – in crypto-related startups including Ripple, Blockchain.info, Bitpay and Kraken. Ver’s company, MemoryDealers, became the first company in the world to accept Bitcoin as a payment option for its services.

As reported in the MoneyToken announcement, Mate Tokay has been involved in the cryptocurrency business as a miner since 2013. He co-founded Bitcoinist.net a cryptocurrency news magazine and he is now the COO at Bitcoin.com – one of the most popular source for bitcoin related news and information.  

MoneyToken is a cryptocurrency-backed lending platform that provides loans to cryptocurrency holders. The main idea is that a borrower who owns cryptos may simultaneously deposit cryptos as a long-term asset and spend it at the same time by investing in new initial coin offerings (ICOs), or by trading at exchanges.

Joining forces

“MoneyToken is a bright example of the real use of blockchain technology, as well as offering a massive boost for crypto market liquidity for all market players, and especially for businesses,” Roger Ver said at the press release on the partnership with MoneyToken.

With leading Bitcoin.com executives on the board of advisors, MoneyToken faces new opportunities. “Now Bitcoin Cash holders can enjoy the benefits that MoneyToken offers – leveraging their assets and spending cash, while continuing to hold their crypto positions”, says the announcement.

“The Bitcoin Cash community is a unique and powerful force in cryptocurrency. Adding our support to Bitcoin Cash and allowing our potential token buyers and future lenders and borrowers to operate in BCH, only adds to our portfolio and strengthens the value of MoneyToken as a product for all our users.” Commented Jerome MacGillivray, Co-Founder of MoneyToken.

Conquering fintech user’s hearts

The MoneyToken platform, aimed at miners, projects that made their token sales, traders, investors and exchanges, will allow holders of crypto assets to gain access to loan-based financial services, using cryptocurrency as collateral.

The MoneyToken business model works as following. Any user may deposit his Bitcoins, Ethers or other coins at MoneyToken and in return receive the a loan that may be spent on investments in US dollars or cryptocurrencies.

MoneyToken has launched its public token presale on May 2, 2018 with a 20 percent bonus. The crowdsale campaign will last until June 6, 2018. So far, the MoneyToken team has overpassed its softcap goal, having raised almost $10 mln. The hardcap is $41.5 mln.

Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor this article can be considered as an investment advice.

Posted on

Arrington-Backed Startup Launches Crypto-for-Cash Credit Platform

Cryptocurrency startup Nexo, which is backed by TechCrunch founder Michael Arrington, has launched a cash-based lending platform.

Announced Monday, Nexo provides loans or extends a line of credit using its own assets, said managing partner Antoni Trenchev. To that end, the startup raised $50 million from investors, which will be used to provide liquidity to the company’s platform. This departs from existing crypto-backed lending solutions, which instead connect borrowers with other individuals willing to loan out their funds.

This structure allows Nexo to provide instant loans without requiring credit checks or the time delay that manual approval processes require, Trenchev said.

The startup, which was spun off from European fintech firm Credissimo, has also partnered with blockchain security firm BitGo, which acts as its custodian, Trenchev told CoinDesk. Further, the company is now looking to team up with a small Federal Deposit Insurance Corporation bank to store assets.

He added:

“All of the software, all of the automation process is something we have developed ourselves, and most of the tools, we have used them for several years. All of our software and automation process are [use by Credissimo]. … We have developed our own models of insuring and protecting our business.”

Notably, the company is backed and advised by TechCrunch founder Michael Arrington, who told CoinDesk that he is one of the startup’s financial backers.

Nexo is acting similarly to a bank with its lending model, according to Arrington.

“I haven’t seen anyone do a good job so far of providing liquidity for people who have cryptocurrencies without forcing them to sell the cryptocurrency, or to put it more succinctly, provide a proper credit line to people who own cryptocurrencies,” he said.

Trenchev said Nexo wants to set a precedent for traditional financial institutions, namely banks, and prove that cryptocurrencies can be trusted as an asset.

“If you look at the trend with cryptocurrencies, volatility is going down, it’s still very volatile … [but] we are pretty confident that volatility is on a downward trend and will continue to do so, which will make our model even more robust than it is,” he said.

Ultimately, Trenchev concluded, Nexo’s benefit comes from the fact that it lets clients “spend the value of [their] crypto without having to spend it.”

Bitcoin and dollars image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.