A cryptocurrency lending platform is campaigning to be allowed to also accept fiat money as collateral, according to a company announcement published in Medium.
ETHLend has begun a licensing process which if successful will allow it to operate in more than 30 countries in Europe, according to the announcement. It also intends to pursue licensing in the US on a state-by-state basis, and in selected countries in Asia.
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ETHLend is a decentralised application on the Ethereum blockchain which offers peer to peer lending. Its stated purpose is to remove financial institutions from the process of taking out/giving financial loans, using smart contracts to allow individuals and businesses to “create a loan contract on their terms”.
According to the official website, this system has three main advantages. It removes the need to trust a loan provider because collateral is controlled by the smart contract, it is entirely transparent, and it is accessible to a greater number of people.
With a loan executed on this system there only are only two possible outcomes: one, the loan is repaid and the contract fulfilled, or two, the loan is not repaid and the borrower’s collateral is received by the lender.
If ETHLend is successful, users will be able to receive cryptocurrency loans after pledging fiat. According to CEO Stani Kulechov, the company compliance plan is as follows:
“Our next step is to implement KYC identification during the Q2 on the decentralised application by using a third party KYC provider and complying with all the applicable data protection laws. By exchanging our know-your-customer policy, we are de facto able to broaden our services to more institutionalised borrowers and lenders in demand.”
ETHLend raised almost 18 million dollars in its ICO which ended on the 30th of September 2017. The system’s native token is called LEND. According to coinmarketcap.com, it has a market capitalisation of just over 64 million dollars.