Crypto Lender Sees High Demand for Stablecoin Loans in Chinese Market
Asia-based crypto lender BabelBank has announced a record-high number of crypto-collateralized loans issued amid new rebranding efforts. The crypto firm will now be called BabelFinance, a name change which, the company says, signifies its efforts to offer broader services for crypto users, especially in the Chinese market.
In a statement, the crypto lender claims to have issued over $100 million in loans since it launched in July 2018. Furthermore, it says that it has issued $18 million to new customers within a 24-hour period. BabelFinance carries an outstanding loan balance of just $88 million.
“Compared to one of our counterparts, Genesis Capital, our accumulated loan balance is actually small,” Flex Yang, BabelFinance’s CEO, told Bitcoin Magazine.
“Crypto lending is all about having strong partners, and we work with Genesis Capital to help amass loans,” Yang continued. “For now, they are actually contributing to a large portion of our new balance as a funding partner.
Partnerships seems to be a key ingredient in this startup’s early success. According to Yang, the bulk of the company’s customers come from China, which is ironic considering the blanket ban on cryptocurrencies in the country.
The Chinese Market
Since China banned crypto trading in 2017, crypto investors have had a lot of adapting to do. Tether and virtual private networks have become two alternatives that investors use to circumvent the laws of the Communist Party.
Cryptominers, on the other hand, still have free rein to operate in the country. This is where BabelFinance gets a chunk of its customers from. The company might not be a household name in China, but it’s becoming quite popular with mining companies. Yang said the company maintains relations with the “top mining pools and the biggest electricity provider for mining in China.”
He added, “We maintain a professional atmosphere and are always available when Chinese miners need to get in touch. We have been endorsed by KOL (Key Opinion Leaders), as well as several custodian service providers in China. Our product is user friendly, and our repeat rate and referral rate are [the] highest in the industry.”
Crypto Winter Was a Blessing
Cryptominers were hot on the firm’s heels during crypto winter. The reason was obvious. Crypto prices had taken a hit and they needed a way to secure the value of their crypto assets amidst the bearish market. Their preferred products were stablecoin loans backed by bitcoin, according to Yang. Investors could send in their bitcoin to receive loans in stablecoins. Using these forms of loans, investors can realize a level of price stability during volatile months.
Stablecoin loans might be one of the most sought-after products at BabelFinance, but the company offers more than just crypto-backed loans in its portfolio.
The crypto lender says that it is rolling out new products for both retail and institutional investors. These include hedging tools, recurrent investment plans and “Babel Triple.”
Yang said that Babel Triple leverage is targeted at high networth individuals who want to benefit from the price appreciation of bitcoin but “with controlled downside risk.” Other products in the mix include access to large over-the-counter (OTC) transactions, OTC to BTC derivatives trading and others.
BabelFinance will also roll out BabelLabs, a research and development startup that would support research on decentralized finance.
“We see a better crypto finance world. It is our corporate responsibility to support innovation with better financial tools and solutions,” Yang concluded.
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