Uphold Will Start Offering Cash and Crypto Loans in Partnership With Salt
Uphold announced a partnership with crypto-backed lending company Salt in order to offer its users the possibility to request loans using cryptocurrencies as collateral. The news was reported by Finance Magnates on December 13.
Crypto Loans for 1.7 Million Users
Uphold, a cloud-based financial services platform that enables anyone, anywhere to move, convert, hold, and transact in any form of money including precious metals, has just entered the cryptocurrency loan market. Thanks to the partnership with Salt, a crypto-backed lending company, Uphold’s 1.7 million users will be able to procure cash loans against collateral of their cryptocurrencies. Currently, digital assets accepted as collateral are Bitcoin, Ether, Litecoin, Bitcoin Cash, Dash, and XRP.
Robin O’Connell, Uphold’s chief revenue officer, explains that the partnership has been established to allow uphold users to have access to liquidity without necessarily selling crypto assets.
According to the website, to apply for a loan a user needs just to decide how much money he wants to borrow – minimum loans starting from $5,000 – and deposit the collateral requested. No income or credit checks required.
The assets are then locked in cold storage and protected by robust, multi-signature processes. Moreover, Salt offers deposit insurance and allows flexible loan management in case of a meaningful price drop. The payback can be done with cash or stablecoin.
Crypto-Backed Loans Remain Popular Despite Risks
The market for loans backed by cryptocurrencies has had an impressive evolution in 2019 approaching a cap of $5 billion. The industry emerged in 2018 at the height of the cryptocurrency bull market when investors wanted to leverage their digital assets to obtain credit.
Although this isn’t a perfect system and there are some setbacks, with the most obvious being the volatility of the crypto market and thus, the fluctuating value of the collateral. In the case of a crypto price crash, the borrower could be required to buy more cryptocurrency to cover the difference, even as the original collateral is sold off to pay back the loan.
Among the most famous operators of the crypto lending market, we find BlockFi, Salt, Nexo and Genesis Capital which have all demonstrated substantial growth since launching.