Monsit Jangariyawong/123RF

Blockchain In Lending Use Case #4: BlockFi

  • 12 May 2019
  • Emilia Picco Emilia Picco

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 Zac Prince, CEO of BlockFi, to understand how his company is using blockchain to transform the lending business, and what the future of the industry holds.

Zac Prince

1. What's the story behind BlockFi? Why and how did you begin?

ZP: We started BlockFi in 2017 after my experience of getting turned down for a loan from a bank for reporting Bitcoin as an asset. It became clear to me that crypto is the ultimate equalizer. The ability to   transfer assets of any kind across the planet is one of the most important inventions in our lifetime and BlockFi is working to become a major part of that emerging ecosystem.

2. Please describe your use case and how BlockFi uses blockchain

ZP: We currently have two products, USD loans and an interest account.  Our loan product enables crypto owners to access low cost debt liquidity – without selling their assets.  Our interest account is the only product in the market that offers completely passive, compound interest on Bitcoin and Ether.

All transactions, to and from the BlockFi platform happen on-chain. When we send funds to a customer, or when a customer sends funds to us, it's all verifiable on the blockchain. This empowers us to service customers across the globe, especially to those in countries with unstable financial systems who do not have access to low-cost credit or financial products offering interest-earning accounts with competitive interest rates on their money.

3. Could you share a specific customer/user that benefits from what you offer? What has your service done for them?

ZP: We have customers from all walks of life. A number of our customers use BlockFi loans to pay down high-cost debt without having to sell their crypto. When you compare credit card rates, which can be as high as 20%, a BlockFi loan that starts at 4.5% is a fantastic alternative. We're proud that we can help people escape downward debt spirals and get their financial health back to a stable level.

We also have customers that use us to help them their tax exposure triggered by owning and trading cryptocurrency. Bloomberg recently interviewed one of our customers, who “used some of his Bitcoin as collateral to borrow nearly $100,000, a move that let him keep his cryptocurrency and avert a tax bill on the newly acquired cash.”

4. What other blockchain lending use cases are you excited about?

ZP: BlockFi was founded with the idea of providing debt and credit product that are both easy to use and affordable to the average person around the world. We're excited about the implications of crypto credit and debit cards. The ability to spend your crypto with something as simple as a credit card number is a great step for the entire crypto ecosystem. This is something we're actively working on adopting into our suite of services.


5. Where will BlockFi be in five years?

ZP: We will continue to diversify our product suite with crypto themes – adding functionality for best execution trading + portfolio management and innovating ways to earn more crypto.  We also envision a world where we have clients that are interested in using our services only in USD and not for crypto.  In this sense, we will become a Neo or Challenger Bank, built on blockchain rails instead of the traditional system.

Emilia Picco
About Emilia Picco

Emilia is the Managing Editor of Disruptor Daily and has been with the team for over two years now. She has a deep passion for technologies that will reshape our world and has interviewed many of the world's leading thought leaders. She lives in Argentina and as expected, is a wine lover.