Coin-backed P2P platforms shrug off crypto volatility
THE MARKET for initial coin offerings (ICO) incorporating peer-to-peer lending has remained vibrant despite wider volatility among cryptocurrencies.
Digital currencies such as Bitcoin and Ethereum suffered from price falls in January but many firms are still seeing the benefits of creating their own cryptocurrency to use for P2P lending. One provider, SOFIN, is currently looking to raise up to $1m (£720,000) to create a token that can be used as a tool to bypass high exchange rates so loans can be funded internationally.
Instead of having to pay exchange rates for converting from one currency to another, up to 20 per cent of a loan would be funded by the token which the borrower could convert into their local currency. The platform plans to increase this capability to the full loan eventually.
It marks a busy time for P2P ICO launches. Stephen Findlay, chief executive of P2P investor BondMason, is working with global cryptocurrency expert and University of Cambridge Research Fellow Dr Garrick Hileman on ARC Reserve Currency, a cryptocoin aiming to provide a digital currency for those living in areas with high inflation or under-developed banking systems.
Another offering, FintruX, is looking to raise a minimum of 5,000 ETH (Ethereum) in return for tradeable FTX tokens as part of an international unsecured loans platform.
Meanwhile, cryptobacked P2P lending platform ETHlend, which had a successful ICO at the end of last year, has partnered with technology provider Enigma to help record and store transactions more securely.
This article featured in the February print edition of Peer2Peer Finance News. Read the magazine online here.