One of the world’s leading global bitcoin exchanges is now offering a peer-to-peer lending function.
OKCoin is a Chinese digital currency trading platform and exchange – perhaps the world’s busiest. OKCoin.com is the international arm of the online marketplace. After having been founded back in June 2013, OKCoin quickly became China’s largest exchange in terms of trade volumes. The new P2P wrinkle – now worked into the makeup of the international exchange – will allow coin holders to make low-risk loans to traders.
In the style of a more standardized P2P operation, traders will be able to set a range of interest rates that they’re willing to pay. The OKCoin.com marketplace automatically match makes between lender and borrower based on pre-determined criteria. Loan durations range from 3 to 360 days. Lenders have the capacity to insure themselves against the possibility of bad debt – at a charge of 10% of their interest earned, paid to the platform. Traders may borrow to the point that they are somewhere between 2.2x to 3x levered – depending on their “VIP level”.
A comparable system of lending is already in place on the Chinese version of the site (OKCoin.cn), which has generated a long pipeline of loan-seekers. According to CoinDesk, this is not the first time that such a feature has been carried by a cryptocurrency exchange. BitVC, for instance, also facilitates peer-to-peer lending, but with fixed interest rates attached.
OKCoin is hoping that the newly fashioned lending element will bring increased liquidity to its spot market. This is just the latest in a series of flings between the two disruptive forces of cryptocurrency and P2P lending, and we fully expect to see more over the course of 2015.
AltFi is returning to Amsterdam for its second annual Summit in the city. The inaugural event last year was a roaring success, with key figures from across Continental Europe's alternative finance and digital banking sectors highlighted. These included Jeroen Broekema, managing director of Funding Circle Netherlands, and Mieke van Engelen, head of innovative partnerships at ABN AMRO's standalone lending platform, New10.