- Crypto-exchange Bitifinex is launching a new P2P lending platform called Bitifinex Borrow.
- Bitfinex users will be allowed to use their crypto-holdings as collateral to secure loans in either USD or USDT.
- The exchange follows in the footsteps of rival and crypto-exchange giant Binance.
Crypto-exchange Bitfinex is launching a P2P lending platform, allowing users to use their crypto-holdings as collateral to secure loans.
Bitfinex, one of the largest exchanges in the world, has just announced plans to launch a new peer-to-peer (P2P) lending platform called Bitfinex Borrow. Users will be able to secure loans in USD or Tether (USDT) using their crypto-holdings as collateral up to a value of $250,000.
These loans will be able to be used for trading on the platform or can be withdrawn for use elsewhere, with interest varying between 5.5% APR and 18.25% APR.
Initially, only fully verified Bitifinex users who have gone through the full ‘Know Your Customer’ and ‘Anti-Money Laundering’ checks will be able to use the new platform.
The crypto-backed P2P lending market has seen an explosion in recent times as it a quick and easy way to borrow capital against crypto-holdings without the need to sell out of one’s crypto-investments.
Analysts expect the market to be worth over $390.5 billion by 2023 as more and more players enter the market.
In launching this new P2P lending platform, Bitfinex follows in the footsteps of several other giants in the crypto-exchange business. Last year the world’s largest exchange, Binance, launched a loan feature similar to that of Bitfinex, allowing users to use their crypto-holdings as collateral to secure loans via their platform.
Binance, like Bitfinex, already offered loans to traders in the form of leverage, but also wanted to capitalize on this growing industry.
The early days of crypto saw a wild west of P2P crypto-lending businesses such as BTCJam and Loanbase allowed uses to lend and borrow without any checks or any collateral at all. For obvious reasons, these businesses did not last too long as they were quickly taken advantage of.
However, the revival of this industry comes at a time when lenders are bigger, more responsible and have more resources to ensure they remain compliant with the law. Expect this industry to continue to grow.