https://www.xataka.com/criptomonedas/llegan-prestamos-criptomonedas-como-garantia-como-hipoteca-bitcoins-vez-inmuebles

Cryptocurrencies have taken another step towards traditional banking. Spanish digital asset company Bit2Me has announced a service that allows for something that until now seemed unlikely: requesting loans in euros using Bitcoins as collateral.

Why is it important?. Until now, if you needed money in euros, you had to say goodbye by selling your cryptocurrencies.

• Now you can keep these euros while accessing them.
• This is similar to taking out a mortgage, but instead of leaving your home as collateral, you give up your cryptocurrencies.

In detail. The service, called Bit2Me Credit, has some interesting features. There is no paperwork or credit work; Everything happens instantly. They also don’t charge you a fee to open or cancel the loan. Moreover, you can return it whenever you want while following the entire process on your mobile phone. The loan can go up to one million euros.

Yes but. There is one important detail: it is necessary to invest more value in crypto than is borrowed, and this can be Bitcoin or Ethereum. This financial term for “overcollateralization” reveals that the crypto industry still needs extra security support as it approaches traditional finance. Screenshot of the service:

Image: Bit2Me.

This is understandable: Cryptocurrencies are sometimes known for extreme price fluctuations. Overcollateralization helps reduce credit risk.

in perspective. What we see is part of something bigger. Cryptocurrency companies are no longer content to simply be digital exchange houses. They want to offer more and more services with a crypto approach that have so far only been offered by traditional banks. Bit2Me, which has the approval of the Bank of Spain, also joins this trend.

It’s tempting to use these loans for all kinds of projects: from buying a home to expanding a business. However, it is important to remember that volatility in cryptocurrencies continues to pose risks for such operations. A significant drop in their prices could complicate matters for those using them as collateral.

Are we facing the future of finance? Maybe. What is certain is that the line between traditional and digital money is increasingly blurring.

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Featured image | Bit2Me