There is work to be done as long as blockchain is awarded to all areas. However, good progress is already being made as far as adoption is concerned. In the financial sector, Ripple (XRP) is being used for intercontinental transactions and is now targeting consumer lending.
Lending in Cryptos
The financial sector is playing a leading role in the implementation of blockchain. Now is a good time for technology to be applied to traditional lending. Blockchain can offer numerous advantages including transparency, efficiency and safety. And all this can be done using cryptocurrencies as collateral.
A cryptocurrency as collateral can provide the entire loan process on its own. If a cryptocurrency asset is approved by the lender, blockchain allows immediate validation of authenticity, ownership and value. This allows the user to obtain immediate support for a loan when he or she has a verifiable means of making the repayments.
Lending Adaptation and Actors
Blockchain companies that are entering the financial space are taking advantage of Ripple (XRP). Companies like UniCredit, UBS and Santander are taking advantage of Ripple. These are real-time gross settlement, foreign exchange and remittance network systems. And for example, the Depositary Network (DEPO) is a multi-platform network that allows all lenders to accept digital assets as collateral.
Another company is SALT, which offers loans backed by Bitcoin (BTC) and Ethereum (ETH) against the US dollar. It uses a peer-to-peer model that centrally matches lenders with borrowers. Lenders can determine the terms of the contract along with the interest rate.
Another example is ETHLend. It offers Ether-based loans backed by ERC-20 tokens. It adopts a peer-to-peer model like SALT but its blockchain is completely decentralized.
In the long term, many assets have the potential to be placed on a token and therefore pledged for a loan. This trajectory means that the overall market potential for cryptocurrency lending will expand significantly in the coming years.