This interview is part of our new Blockchain In Lending series, where we interview the world's leading thought leaders on the front lines of the intersections between blockchain and lending.
In this interview we speak with Vytautas Zabulis, the CEO at HODL Finance, to understand how his company is using blockchain to transform the lending business, and what the future of the industry holds.
1. What’s the story behind HODL Finance? Why and how did you begin?
VZ: We met with our current CTO Gintas for a cup of coffee in central Vilnius. From our shared friends we knew that we were both very interested in blockchain and fintech in general.
That cloudy afternoon by the cup of lattes we both agreed that traditional lending with collateral it was just too complicated and the best way to solve it was actually blockchain. My understanding came from previous businesses in the consumer lending sphere, Gintas saw another, more tech side after 11 years at IBM.
HODL Finance actually was born in that intersection between Gintas's technical skills and my experience in financial services.
2. Please describe your use case and how HODL Finance uses blockchain:
VZ: Blockchain allows HODL Finance to receive the client’s collateral almost instantly. What is more, it not only enables the swift transfer of the collateral saving time for the clients but also ensures confident and control of risks for us, the lender. It is surprisingly challenging in traditional finance.
Generally speaking, it is easy to be deluded while thinking that everything works seamlessly in the financial services industry just as we are used to in our everyday digital lives.
Unfortunately, there is a lot of inertia in this heritage industry today. Technological advancement has been slow and this is where blockchain not only promises but also delivers a revolution.
3. Could you share a specific customer/user that benefits from what you offer? What has your service done for them?
VZ: A traditional user is a person who holds Bitcoin. They hold Bitcoin because of a firm belief that the value of the Bitcoin will increase over time. Our service allows this user to get a cash credit without losing this Bitcoin potential. And if the value of Bitcoin actually rises over time, they will reap the benefit from it – all the upside.
4. What other blockchain use cases in the lending industry are you excited about?
There is little doubt that any real-life items will be tokenized in the future. Real estate, art, various financial instruments. Most of these items will be available as collateral to issue loans. This will have a significant impact on the entire lending space.
Plus, more complex lending products will appear in the near future – loans themselves might be tokenized and transacted further.
5. Where will HODL Finance be in 5 years?
VZ: HODL Finance intends to offer numerous financial services – loans, deposits, cards, and payments, etc. – in a single place. We work not only to deliver that but also to make it work seamlessly, so a child could use it (with parents supervision, of course).
To reach that goal, we must not only deliver advancements and improvements to our existing system but also work closely with regulators in our key markets to meet the highest standards set by them. Compliance, AML, KYC procedures are one of our highest priorities because only by following them we can ensure the trust of our clients and the return to our investors.