Cryptocurrency Mortgage Loan service is finally introduced in Korea
Korean blockchain developer ‘Delio’ has established a cryptocurrency investment bank ‘Deli Funding’ and launched a coin mortgage service where a lien is put on Bitcoin and Ethereum instead of a real estate property. Accordingly, Delio has acquired the license for loan business. The initial business model would likely to be a B2B model and the B2C mobile application would be released by the third quarter of 2019.
Delio is also targeting the mid-range interest rate loan market through a cryptocurrency of their own called ‘Delio Token’. Applying for a mortgage with Delio Token will guarantee a lower interest rate then when applying for a mortgage with Etherium or Bitcoin. Delio hopes the strategy will promote both their loan service and cryptocurrency.
A blockchain developer Basic, located in Singapore is also launching a cryptocurrency loan · deposit service in the third quarter, 2019. Korean cryptocurrency investors will be able to use the service. Like Delio, it will provide a mobile-based free checking account service. There also will be a hyper short-term loan with hourly fixed interests. All services Basic provides will be based on its cryptocurrency ‘Basic Token’.
Personnel from Basic said, “We are expecting interest profit upon launching of loan & deposit service. In addition, various financial products for institutional investors are planned ahead.”
Dunamu, operating the cryptocurrency exchange platform ‘UPbit’, and Bithumb, has also reviewed the financial service plans. Especially the UPbit has planned a cryptocurrency related financial service through its subsidiary company. However, it is postponed as the service may not be in favor of Korean authorities.
Personnel from RootOne, the subsidiary of Dunamu said, “It is true that we tried to make an alliance with a cryptocurrency financial service earlier this year. But currently, we don’t have any plan to start the relevant service due. Our focus at the moment is the cryptocurrency wallet service development.”
An anonymous source from the Financial Services Commission said, “It does not seem to be illegal because the cryptocurrency mortgage loan itself can be just a private transaction.” However, he emphasized that it is only an opinion of his own.
The Korean government is currently not providing clear standards about cryptocurrency financial products. Thus, the cryptocurrency financial market is expected to grow, mainly with startup companies. A source from the industry said, “If license for loan business is acquired, there is no problem at all because it practically is a pawn shop. There are already more than dozens of companies with similar business models in the U.S. and Singapore, and the market size is expected to reach 1 billion KRW within 2020.”
News 1 (2019. 07. 16.) 비트코인 맡기고 대출받는다…코인담보대출 등장
News 1, retrieved from http://www.donga.com/news/article/all/20190715/96482123/1
