Is our bankingsystem threatened?

The battle lines have been drawn and the troops assembled. On the one side stands the combined might of the banking cartels, centuries of deeply entrenched financial infrastructure supporting them. And on the other side stands a handful of crypto companies armed with little more than a passionate plea: “Ditch the legacy system and come join us. Where we’re going, you won’t need banks.”

It’s an enticing call – but is anyone heeding it? Every couple of months, a new trend comes along that captures column inches and crypto Twitter chatter, before everyone moves on to the next new thing. Last month it was defi, before that IEOs, and before that exchange tokens. Right now, the hot topic is crypto lending, and it comes bearing an intriguing question: are crypto lending platforms a solution to a common problem, or a solution in search of a problem to wrap itself around?

Crypto Lending Platforms Prepare to Assail the Banking System?

Before we attempt to answer that, some basic facts: getting a bank loan for personal or business use is extremely hard, verging on the impossible these days. Unless you have property you can collateralize against, you’ll struggle to get a loan, and even if you do, the interest will likely be exorbitant. Gone are the days when you could walk into your bank, have a sit down with the manager and thrash out the terms of a loan with which to start your own business. Attempt that today, casually dropping into the conversation that you were planning your own crypto startup, and not only would you be refused credit, but you’d be liable to have your account closed. Such is the suspicion with which the legacy financial system views crypto. They’ll be proven wrong eventually, around the same time as the last of their venerable banking houses are being converted into nightclubs and apartments.

Crypto Lending Platforms Prepare to Assail the Banking System?

From Bricks and Mortar to Binary Code Bartlomiej Wasilewski is the founder of Marshal Lion Group, a tokenized lending market that provides non-bank loans for businesses and individuals. He told news.Bitcoin.com: “The digitization of finance is inevitable, not just within the crypto sector, but also more broadly, as shown by the rise of microloan platforms that enable individuals to lend capital to businesses, while retaining oversight over how it is deployed, and the ability to witness the benefits of their investment in action and be remunerated for their services.” He added: Within the crypto space, lending is about more than simply attempting to mirror the products to be found in the traditional financial system.

A lot of crypto businesses struggle to obtain banking facilities, and for these entities, having access to alternative sources of capital, be it as a bridging loan or to support long-term growth, is vital. Wasilewski’s vision is slowly materializing, but the wounded banking system is not yet in its death throes. It will likely take a decade or more before digital currencies render it obsolete. In the meantime, those who have been refused credit by financial institutions are being urged to turn to crypto lending. But are crypto lending protocols and platforms enterprise-ready?
And if so, what do they have to offer entities that have been turned away by the banking system?

 

Source: Bitcoin News 29 August 2019

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