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 Alex Faliushin, CEO and Co-founder of CoinLoan, 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 CoinLoan? Why and how did you begin?
AF: At the start of the year 2017, the idea of crypto-backed loans was in the air. At that time, more and more people all over the world started trading cryptocurrencies and the digital assets industry demonstrated an exponential growth. Which leads us to the reasonable question, why sell something that will worth tomorrow more than today. Of course, crypto is subject to some pretty wild price swings, and some other risks should also be considered. Even so, there’s a number of liquid assets, stable enough in comparison with most unreliable coins. We’re talking about BTC, LTC, ETH, XMR for instance.
The concept of a global platform for fast and convenient lending and borrowing was hatched since the end of 2016. In 2017, we already started working on CoinLoan. At that time both my partner, Max and I had long-standing experience at the interface between IT business and finance. That experience gave us a clear understanding that favorable terms, legal and technical security need to be platforms’ first priority.
2. Please describe your use case and how CoinLoan uses blockchain:
AF: CoinLoan allows using liquid cryptocurrency as collateral. Every platform user can act as a lender or a borrower and establish parameters of the deal of their choice. Once a loan is confirmed, the platform controls automatically all the actions required. This includes timely repayments, interest assessments, notifications sending and collateral liquidation in case of necessity.
Basically, we offer a new type of service to crypto holders. The idea of loans, backed by digital assets such as tokenized real estate, for instance, is at the beginning of its development and has great potential as well as blockchain technology in general.
3. Could you share a specific customer/user that benefits from what you offer? What has your service done for them?
AF: CoinLoan is a P2P platform, it means that anybody can act as a lender or a borrower on his own terms for their benefit. Here’re some core advantages for the users:
- Minimal on the lending market commissions.
- Favorable interest rates allow earning an average of 10-12% EUR/USD per annum.
- User-friendly platform interface.
- Transparent referral program.
Since the beginning of the year 2019, we have seen an increase in the number of users who conduct certain transactions in an amount above 3,000 EUR. This reflects the enhanced credibility of the platform and crypto-to-fiat lending market as well.
We would expect large fiat-market actors will find interest in generating income from a new promising investment option. Proposals are coming from banks and institutional investors ready to lend against cryptoassets.
4. What other blockchain lending use cases are you excited about?
AF: As I said, pledging the tokenized assets, or rather property rights of assets is an essential component of the crypto-lending market. We believe that in the near future more and more assets such as securities, industrial and retail goods, real estate and even copyrights will use blockchain, thereby making it possible to use them as collateral.
5. Where will CoinLoan be in five years?
AF: In five years, the company will provide any bank or credit company an opportunity to lend on the basis of CoinLoan technological solution. We’ll become Western Union in the field of lending backed by digital assets. We’re already working on SAAS model and will be ready soon offer it major players from all over the world.