PawnHub Set to Cash In on the Growing Crypto Lending Market

Bob Coiney

March 31, 2020 , a Hong Kong-based crypto lending firm, is one of the first companies granted a lending license from the Hong Kong government. The organization will now partner with the US-based cryptocurrency custodian in order to provide insurance coverage for clients’ Bitcoin assets up to $100 million USD. 

Crypto lending has become an important part of the crypto ecosystem with PawnHub. It will be the first regulated Asia-based crypto lending firm which will serve the interests of South Korea, Japan, China as well as Singapore. As per the latest announcements Pawnhub has received the requisite governmental approval and has received a green light for operations. This can only be seen as a positive. While at the heart blockchain and cryptocurrency is decentralized, regulating business also provide clear guidelines for consumer and business. 

PawnHub provides financial loans with crypto backing. It secures the loans with Bitcoin collateral which is returned when the entire loan amount is repaid. In normal circumstances, clients can take loans without offloading any Bitcoin securities. But PawnHub provides loans only when there is adjoining collateral.  

The current debt-to-asset ratio in the crypto market has close to 2%. 

The company is looking to register profits from Bitcoin’s accessibility. Cryptocurrency adoption has led to an enhanced liberation in the financial system and in such market sentiments, the PaunHub loans also could rank high on the popularity charts. The crypto lending industry is increasing at a staggering rate. Cryptocurrencies are yet under-leveraged with an estimated value of $200 million.

That portion of the population that has no access to banks may find it extremely difficult to access loans, especially in third world nations. They do not possess accounts or any credit history owing to a lack of presence of relevant documentation.

This is mainly because the countries lack the basic financial infrastructure which is why cryptocurrencies have assumed greater importance. PawnHub will take advantage of the growing crypto markets in order to provide loans to those that have cryptocurrencies.

Its U.S custodian will provide up to $100 million insurance coverage for the assets of PawnHub’s clients.

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