Brand New Feature for Crypto-Lending: Fiat and Stablecoins Become Collateral

milestone Mar 26, 2020

CoinLoan now offers “reversed” loans you can’t find anywhere else. We are talking about loans in cryptocurrencies secured by stablecoins or fiat. On the Lending Market, users can now borrow BTC against USDT, or XMR against EUR, for instance.

We have reversed crypto-lending to offer lenders and borrowers new ways to put digital and fiat assets to work. CoinLoan has proved, yet again, its status of the most advanced crypto-lending platform. We’re now the only company in the market that offer all three dimensions of loans: crypto-to-fiat, crypto-to-crypto, and fiat-to-crypto.

How to take a reverse loan?

New loan combinations have emerged on the Lending Market. Here is the list of currencies, now available as collaterals:

  • EUR;
  • EURS;
  • USDT;
  • USDC;
  • PAX;
  • TUSD.

You can get a loan in BTC, ETH, LTC, and XMR backed by those fiat and stable assets. To issue a loan, accept a Loan Offer or create a Loan Request, as shown in Picture 1.

Picture 1: New loan combinations on the Lending Market

Please notice how LTV is calculated

For reversed loans — reversed LTV. You still need to monitor crypto-market moves and keep the healthy loan-to-value ratio but differently.

Collateral (fiat or stablecoins) is stable and loan currency (crypto) is volatile. The loan-to-value ratio is likely to change because of loan currency moves.

The lower the price of your loan currency goes, the better it is for your loan. In contrast, the higher the value of a loan currency goes, the smaller gets the gap between collateral and loan value, and the higher is LTV. In a nutshell, a borrower now needs to worry about if the price of crypto goes too high. Down with the confusing explanations, let’s think of an example.

The Loan Request in Picture 2 below offers the baseline data for further calculations:

  • Collateral amount: €1.218 EUR
  • Loan amount: 0.1 BTC
  • LTV: 50%

At the current rate of bitcoin, which at the time of writing exceeded 6.000 euros, 0.1 BTC costs about €605. Relatively low 50% LTV makes the loan pretty safe.

However, as soon as bitcoin’s value rise close to €10,000 a coin, you will have to take measures to maintain your loan. The moment your 0.1 bitcoin stands at €968, LTV will equal 80%, and you’ll get the fist alert from CoinLoan.

Picture 2: An example of a reversed loan request

💡First time here? Visit our home page and get to know the CoinLoan lending platform a little better.

Great! You've successfully subscribed.
Great! Next, complete checkout for full access.
Welcome back! You've successfully signed in.
Success! Your account is fully activated, you now have access to all content.