Binance Partners With Blockchain-Based Startup Libra Credit for Loans Collateralized by BNB

Francisco Memoria
  • Binance Labs recently partnered with Libra Credit to offer loans collateralized by BNB.
  • The partnership aims to address the "growing global demand for liquidity of crypto assets based on the Ethereum blockchain."

Binance Labs, the investment arm of leading cryptocurrency exchange Binance, has recently partnered with Libra Credit to offers its users loans where the exchange’s BNB token will be used as collateral.

According to a recently published blog post, the partnership will see Libra Credit, a platform building a decentralized lending ecosystem to facilitate credit, lend fiat or cryptocurrencies to BNB holders who pledge their tokens as collateral.

Libra Credit notably finished its initial coin offering (ICO) earlier this year, where it raised $26 million selling its LBA token. It’s now planning on launching a mobile app for borrowers, as well as a desktop lending platform.

Per the post, the partnership aims to “address the growing global demand for liquidity of crypto assets based on the Ethereum blockchain.” Binance Labs’ chief executive officer Ella Zhang was quoted as saying:

The Libra Credit founding team has a wealth of experience and resources in financial services and payment solutions. They are committed to make long lasting impacts in the industry.

Ella Zhang

Binance itself has been rapidly expanding. Recently, CryptoGlobe reported the cryptocurrency exchange is planning on entering the South Korean market, at a time its chief executive Zhao Changpeng revealed he expects $1 billion in profit this year. Its token, the Binance Coin (BNB), has been bucking the bearish trend.

The company’s leading position in the ecosystem saw hackers try to take advantage of it. Earlier this month, they phished users to control their API keys, to subsequently manipulate SYS trading pairs. Their plan seemingly failed, as Binance rolled back irregular trades. In response, it launched a Secure Asset Fund for Users (SAFU).

Crypto Lending Scene

This is a notable development for the cryptocurrency lending market, which has been steadily growing in the past few months. The loans let cryptocurrency investors use coins as collateral, while having funds to invest in new ventures.

Earlier this week crypto bank Galaxy Digital, headed by billionaire investor and well-known bitcoin bull Mike Novogratz, led a $50 million funding round for BlockFi, a cryptocurrency lender that gives investors loans of up to $10 million against BTC or ETH.

CoinLoan, an Estonian startup, also launched a cryptocurrency loan service this year. Other offers on the market include ETHLend, a lending service that sees users lend ETH using tokens as collateral.

Wells Fargo Launches Its Own 'Digital Cash', Claims It's Not a Cryptocurrency

Financial services giant Wells Fargo has announced the launch of a settlement service called “Wells Fargo Digital Cash,” which will run on its distributed ledger technology platform.

According to the company’s announcement, Wells Fargo Digital Cash is a service that’ll bring in operational efficiencies as it’ll remove “barriers to real-time financial interactions” across its own network. The Digital Cash will “complete internal book transfer of cross-border payments” and its concept has already successfully been proven.

Lisa Frazier, head of the Innovation Group at Wells Fargo, was quoted as saying:

  • We believe DLT holds promise for a variety of use cases (…) Wells Fargo Digital Cash has the potential to enable Wells Fargo to remove barriers to real-time financial interactions across multiple accounts in multiple marketplaces around the world.

Speaking to The Block a Wells Fargo representative reportedly clartified that Wells Fargo Digital Cash is “not a cryptocurrency” before adding it is “1:1 against a tokenized USD/fiat currency that runs on a distributed ledger rail.”

When asked whether the Digital Cash could be considered a stablecoin, the representative reportedly stressed it’s an “internal settlement service” running on a “distributed ledger rail that supports tokenized fiat currency.”

Wells Fargo’s project is planned for next year and will initially completed transfers n U.S. dollars, although in the future it’s expected to add support for multiple currencies. The settlement service has been compared to JP Morgan Chase’s JPM Coin, a cryptocurrency developed for “instantaneous” transfer of payments between the financial giant’s institutional clients.

JPM Coin is a cryptocurrency pegged to the U.S. dollar at a 1:1 ratio, and is built on JPMorgan’s Quorum blockchain. Jamie Dimon, JP Morgan Chase’s CEO, has hinted the cryptocurrency could one day be used for retail payments.

 

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