CEX.IO announced a new service called CEX Loans. Users of this cryptocurrency exchange can now borrow USD or EUR against their crypto assets. The new service is launched amid the evolving situation in both cryptocurrency and financial markets. The evolving that is going to become a revolution, thanks to the DeFi boom in 2020.
Cryptocurrency As A Collateral For Fiat Loans
When a big organization like CEX lets users get loans based on their crypto holding, it can be a great sign of evolution. Cryptocurrencies have long been criticized for their lack of trust or even value. Now they are being considered as collaterals.
CEX.IO pays loans from $500 to $500,000 and in duration from one week to one year. Users can choose the time and the amount of the loan based on their interests and holdings. Bigger loans longer in payback duration have lower interest rates, according to CEX.IO.
When traders can get extra money using their crypto holdings as collaterals, they will not sell their cryptocurrencies to access fiat money.
“Using your digital assets as collateral to borrow against, instead of selling, can be a practical alternative. Selling Bitcoin to cover expenses means giving up a potential upside, especially when the exchange rate is not the best. Borrowing against this Bitcoin gives you extra funds you need, while you can still enjoy the price appreciation after,” according to CEX.IO.
As a whole, crypto-backed loans can start a new disruption in the financial industry. Individual users will be encouraged to hold more, and startups and entrepreneurs can get access to emergency money easier.
CEX.IO lets users receive up to 50% of their holdings as a loan. It will happen in minutes, and te requested fiat money will be paid to them. The loans are overcollateralized to prevent the risks of volatilization for both lender (CEX.IO) and borrowers. No credit or other documents like employment checks are needed to get loans from CEX.IO. Traders should only lock their collateral for the specified period.
Users in 217 countries worldwide, including the UK, the EU, and many Asian countries next to Australia, can benefit from crypto-backed loans of CEX.IO.
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