Peer-to-Peer Banking & Funding using Crypto — Enhanced collateral capabilities in this world. A bridge towards the new world.
Collateralized Lending & Borrowing backed by Crypto acts as a necessary bridge between the old guard and the new world — between traditional finance and the new DeFi, decentralized finance.
You can go the traditional way or you can consider taking the off-the-beaten path …
And why not? Instead of or in addition to leveraging your traditional assets and securities (your real estate, business, stocks, or cash) to borrow or refinance existing loans, send in your Crypto as your new stand-in. Without any selling and therefore without triggering a capital gains tax event, peers can help peers quickly and easily — transform the world one big deal at a time.
Pros for Lender: The reassurance of holding an innovative and rapidly growing asset class as collateral.
Pros for Borrower: Leverage, leverage, leverage. Borrowers can leverage the long-term value of their Crypto investment while maintaining the ability to get it back when the loan is paid off.
Cons to be very clear: Crypto is a very volatile market, so if the Crypto pledged as collateral happens to experience a huge drop in value during the loan, your lender may have to bring the loan back to good standing by selling a portion of the collateral.
Pros for Borrower: Once you pay off the loan, you get all your Crypto back and you get to keep all potential increases in value along the way.
Pros for Borrower: Check with your CPA of course on whether the interest you paid on your loan may be tax deductible against your investment income.
Pros for Borrower: Maintain the overall diversification of your long-term portfolio while being able to fund the expansion of say your new business or venture and lower the risk of your overall investments.
Pros for Society: Potentially nudge traditional financial institutions like banks and even Crypto lenders to offer more competitive banking solutions, lower reliance on credit checks, reduce wasteful paperwork, save everyone time and therefore money? They will have to answer the increased competition and become more efficient in how they lend and how they factor in Crypto.
Now more than ever, we need cooperation and coordination within the blockchain space and within us peers to expand the utility of Crypto. Whether it is Crypto lending or Crypto credit lines or Crypto bonds or Crypto structure notes or Crypto rewards for achieving your goals or Crypto compensation for your performance.
Let’s all be clear on 2 trends that are happening as I type:
1. World governments will continue to print money for the next few years to dig countries out of various health, social, and trade problems. As they print, they will tend to dilute their currencies in the short-run.
2. The emergence of new global bio and cyber waves — massive disruptions to life as we know it — hidden or obvious, accidental or intentional. In such disruptive times, everyday people will want to maintain constant control and access to their funds from anywhere in the world at all times — right now through their Crypto holdings.
Crypto is not just your doomsday hedge like gold. Crypto is not just a store of value like cash. Those are true perhaps in the fringes of the current financial world. Even though fringes are a logical part of the revolutionizing of anything! Right now though — we are prime for evolution — realistic, practical utility of Crypto as a bridge we build together as peers for doing good and for expansion in our world. Crypto just may be that safe space in the middle of the chaos.
Imagine a world where … Peer-to-Peer Banking and Funding using Crypto fills the current gap that exits in the world’s understanding of the mystical landscape of decentralized finance. It’s proper and thoughtful utility is expected to ease the current frictions in the world — as long as it is easily understood and just as easily deployed — by your grandma.
U.S. and Global shifts are underway. P2P Crypto Funding can bridge between developing and developed markets, which will create the mega acceleration and hyper innovation that the world needs right now. We must together globally democratize the methods of access and participation to Crypto — an alternative asset class today which will eventually become just another asset for every diversified investor to hold.
In summary, let’s go beyond the current emotion of investor fear around the world. Let’s be rational and see how we can make something productive out of Crypto to advance our world and humanity. How?
1. Create a real-time collaborative think tank — an intellectual mind trust that academically explores big themes around how Crypto can go beyond linear thought, expand collateral capabilities, and deepen the world of Alt-Finance to the next level.
2. Create a real-time channel that marries the Crypto world to today’s large-scale deals via hybrid Fiat/Crypto leverage along with public vehicles such as SPACs to truly provide liquidity, enhance value, and create expansive opportunities globally.
3. Abandon the narrow and self-serving US vs. THEM mentality. It is not Bitcoin vs. Cash OR Ether vs. Gold OR Crypto vs. Stocks, etc.
4. As a Crypto holder yourself, accept Crypto as collateral and also pledge your Crypto as collateral in your large deals. This give-and-take not only hedges these deals, but also creates a whole new way of funding big real estate and technology deals while keeping the Crypto assets in the hands of the owners — creating what the world needs most right now: a healthy long-term duality of hyper innovation.
This is a time of shift that we need to get in front of — NOW.