Gone are the days when money used to be backed by gold or commodities, thanks to the wide-spread adoption of credit-based economic systems where debt drives consumerism and not the purchasing power itself. In such a setup, increase in usage of credit cards and loans doesn’t come as a surprise.
There are a number of lending platforms; both online and offline that helps people borrow money against collaterals. For the first time, SALT — Secured Automated Lending Technology is blending traditional lending with cryptocurrencies, offering the best of both worlds in the new-age economy.
SALT, a financial ecosystem of its own, recently introduced the first lending platform that offers its members loans in various fiat denominations. Unlike conventional loans, these loans are issued against blockchain assets as collaterals. Meaning, individuals can borrow fiat currency by pledging their Bitcoin or Ethereum holdings. Such a system will be of great help to the growing cryptocurrency community, most of whose members prefer to hold their wealth in blockchain assets.
In its latest press release, SALT’s CEO Shawn Owen was quoted saying,
“Currently, if you are a holder of blockchain assets, a large piece of your financial wealth is not being recognized by lenders. With SALT, we see a future where virtually all of the world’s value is on blockchains, and lending is reflective of our globally-connected, digitized lives.”
SALT’s lending model considers the potential borrower’s blockchain asset value and not the credit score, which can prove to be beneficial to those who have limited access to traditional financial services. At the same time, it also allows lenders to efficiently utilize their capital, which on many occasions doesn’t happen due to increased focus on the creditworthiness of borrowers.
Eric Voorhees, the creator of ShapeShift and one of SALT’s board of directors, said,
“SALT’s disruptive innovation is an important project for broadening the usefulness and global reach of blockchain technology.”
The increasing value of crypto-assets like Bitcoin and Ethereum, combined with the growing strength of cryptocurrency community, SALT could see higher adoption in the near future as fiat will continue to dominate the financial ecosystem.