How to borrow cryptocurrency?

According to The World Bank in 2019, loans to the private sector by banks around the world accounted

for 90% of global GDP, and interest rates on deposits in the world have not increased for almost 10 years. There is a huge need for money in the world, which banks, for various reasons, cannot satisfy and which is partially “pulled over” by the cryptocurrency. According to the cryptocurrency bank PointPay, the market for crypto loans, where bitcoin and stablecoins are pledged as collateral, is estimated at approximately $ 30-35 billion in 2021 – and it continues to grow.

x

The Cambridge Center for Alternative Finance in 2020 established there are at least 100 million cryptocurrency users in the world. But this is only the active part of users, the unsatisfied demand for cryptocurrencies, especially during the bull run, is much higher. Interest from both large institutional investors and private investors skyrocketed following the price. So, more than 50% of recipients of incentive payments in the United States are ready to invest them in bitcoin. This suggests that the demand for cryptocurrencies as investments in the presence of free funds from citizens around the world is enormous. Blockchain projects have picked up this trend and are creating cryptocurrency banks that are ready to lend digital money before anyone else. Experts of the world’s first blockchain bank and the PointPay ecosystem talk about where and how you can borrow cryptocurrency.

Not everyone can use the card

The easiest way to borrow digital money would be to buy cryptocurrency directly by paying with a regular credit bank card. But this is not always possible. The classical banking system in many countries is wary of cryptocurrencies. And there are banks that are unfriendly with cryptocurrencies that prohibit buying crypto with a credit card. This is one of the reasons why cryptocurrency loans are so in demand – it’s not always possible to spend money from a credit card on bitcoin just like that. About three dozen banks around the world are unfriendly with cryptocurrencies and prohibit buying them with credit cards, among such banks are institutions in the USA, Canada, Europe, China, India, Australia, and the Middle East: Citygroup, Capital One, Discover, Bank of America, TD Bank, Bank of Montreal, Royal Bank of Canada, Nordea Bank, Danske Bank, Lloyds Bank, and others. The official position is that cryptocurrencies are too volatile and that the collateral cannot be sold, simply taken away from the owner.

In fact, there are fears that cryptocurrencies can shake the traditional banking system: the bank does not have the ability to control the borrower’s cryptocurrency accounts, in the event of a default of cryptocurrencies, clients will go to real banks to revise the loan conditions, and, finally, the third reason is that blockchain technology is much more transparent than banking as we know it.
One way or another, according to Point Pay, about 15-20% of cryptocurrency buyers from more than 200 countries on the platform use a credit card. A 2018 study by Lend Edu announced roughly the same numbers. In 2020, according to The Student Loan Report, 1 out of 5 students in the United States buys cryptocurrency on credit in the hope of getting rich.