Back in July, news.Bitcoin.com reported on the cryptocurrency-backed USD lending platform, Blockfi, which raised $52.5m from investors in an investment round led by Michael Novogratz’s Galaxy Digital. On Monday, Blockfi announced the firm is now servicing residents from California and the latest expansion leads to the crypto-lending service being available in 44 states.
Blockfi Expands to California, Capturing 44 US States
On August 27, the firm Blockfi announced that the crypto-lending business has received license approval in the state of California, which marks the company’s coverage in 44 states across the US. Blockfi is a cryptocurrency-backed USD lending platform that allows users to get dollars by using BTC and ETH as collateral. Essentially Blockfi users apply for a loan and get a decision from the firm and loan terms that day. After the approval, the client then deposits BTC or ETH into a storage address, and from there Blockfi transfers USD to the customer’s bank account. Blockfi users make monthly payments in USD or crypto and can get the original funds back after paying off the loan.
Blockfi believes the license approval for California shows there’s a lot of interest stemming from the US for a crypto-backed lending platform that follows regulatory compliance standards. Speaking with news.Bitcoin.com, Blockfi’s CEO Zac Prince says investors are very interested in a secure and compliant crypto-lending product.
“We’ve found that a lot of crypto-asset investors are hesitant to use their crypto because of concerns with security and trust in the space — Blockfi and our institutional investors view these items as being mission critical to our success,” explains Prince.
“We’ve built our platform with an institutional-quality approach from top to bottom — Our asset custody is done with Gemini, a US-based trust company and exchange with robust security practices and cold storage functionality.”
They also have a perfect track record with no hacks or customer fund losses — We also have a bankruptcy remote funding structure and 3rd party loan servicer in place to ensure that even if something were to happen to Blockfi, our customer and investors funds will be protected and the terms of loan agreements honored.
Blockfi Joins the Variety of Cryptocurrency-backed Lending Platforms Available
Prince emphasizes the company’s focus is to provide affordable debt products to the blockchain ecosystem. He believes this would appeal to individuals and corporations that want access to liquidity without selling their cryptocurrencies. Prince and Blockfi also claim they offer the lowest digital asset-backed loan rates in the US market with interest rates ranging from 10–13.5 percent.
“We’re the leading and most affordable option in the US market and plan to make our products as borderless as possible over time,” Prince details.
Blockfi believes the company’s entry into California is a good sign and the firm plans to grow their credit services in other global territories. Additionally, Blockfi says they will offer more credit products like credit cards as well.
“We expect to have a major impact on the global availability of low-cost credit,” Bitfi’s CEO concludes.
Blockfi is complemented by a slew of other crypto-to-loan services out there in the world today. This past June the Japanese Abic Corporation announced the launch of a crypto-backed loan platform. Then there’s also Salt Lending, Unchained Capital, Nexo, Coinloan, Othera, Ethlend, and Everex.