BLOCKCHAIN
BLOCKCHAIN
BLOCKCHAIN
If life gives you crypto, use it as collateral for real-money loans
Think of cryptocurrencies as lemons. Owners can keep them in the fridge or take them out and make lemonade, Tom Collinses or a meringue pie. Of limited options, many have been idle with their digital tokens, but startups are coming up with creative ways to squeeze more juice out of them, including real money loans.
“We know they can do more things than what they have done for us necessarily in the last 10 years,” said Joe Kelly (pictured), co-founder and chief executive officer of Unchained Capital.
Kelley believes that cryptocurrencies have the makings to be the most useful assets in the world. Unchained Capital’s mission is to tap the true potential of crypto. “Our first product is loans. We give out dollared loans in U.S. dollars to individuals or to businesses who provide cryptocurrency as collateral.”
Unchained Capital holds Bitcoin or Ethereum tokens in custody until borrowers pay back the principal and interest.
Kelly spoke with John Furrier (@furrier), host of theCUBE, SiliconANGLE Media’s mobile livestreaming studio, during HoshoCon in Las Vegas. They discussed how Unchained Capital’s loans work, and what might be made of cryptocurrency economies down the road.
Taking crypto to the bank and beyond
Based in Austin, Texas, Unchained Capital developed policies that deal with cryptocurency’s fluctuations in value. For example, if the price drops by 25 percent, the company will issue a margin call, requiring the borrower to post more collateral. If the client fails, then the company can declare the loan in default. Luckily, Unchained has had no defaults so far, Kelly said.
An assortment of credit funds, high net-worth individuals and others fund Unchained Capital and pledge to back the loans. It is an idiosyncratic group; not everyone in finance is comfortable with the volatility of crypto, Kelly said.
The average Unchained Capital loan is $120,000; the largest it’s issued is over $1 million. The recipients can attest that crypto can impact people’s lives in a tangible way — it’s not just a get-rich scheme for computer nerds, Kelly said. “Our clients are buying homes; they’re investing in real estate; they’re investing in businesses and paying off credit card debt.”
The company will soon release some storage and custodial technologies that help keep cryptocurrency safe while consuming products like a loan, he said.
Watch the complete video interview below, and be sure to check out more of SiliconANGLE’s and theCUBE’s coverage of HoshoCon 2018.
Photo: SiliconANGLE
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