Users can access credit based on their cryptocurrency assets, while retaining ownership of that digital currency.
Backed by FinTech group Credissimo, Nexo is heralding the launch of its new platform for instant, crypto-backed loans.
The company claims its new product “irrevocably alters the blockchain landscape” by allowing investors and businesses to access instant cash based on their cryptocurrency assets, while retaining ownership of them. Nexo’s claims its “innovation marks an important milestone for the cryptocurrency space, as the platform has the potential to free up hundreds of billions of dollars for spending” that would otherwise be tied up in wallets with relatively limited uses at present.
There is a fairly simple-sounding procedure to access Nexo’s instant loans. First assets must be deposited in a Nexo Wallet, provided by BitGo; the customer will then receive an “instant and flexible” credit line and can spend money instantly by care or by withdrawing to a bank account. The company claims there are no minimum repayments or hidden fees, and interest is only charged on money that a customer uses. Repayments are possible at any time, and can be debited from the available limit.
In a direct appeal to Hodlrs looking to make the most of their assets, Antoni Trenchev, Managing Partner of Nexo, said:
“71 percent of investors have much higher price targets for various cryptocurrencies and plan to hold their digital assets as long as possible. Nexo is giving them the means to spend the value of their crypto without having to sell it. This is important for the entire community, as our product aims to provide a meaningful mechanism for credit facilitation.”
The company’s press release also points out that, since its clients borrow against their crypto assets rather than selling them, no capital gain taxes are triggered. This helps with “tax optimisation”, it says, and is “especially useful in jurisdiction with high taxation rates”. Also, as the loans are secured against digital assets, no credit checks are required.
Nexo claims to already have loan requests in “excess of $1bn”, adding that “team is now dedicating all efforts to meet that demand.”