Nexo, a platform for crypto-backed loans, announced partnership with UTRUST, a secure payment platform with a native ERC20 token.
The UTRUST model for payments is unique in that the transaction fees get lower with growing amount of transactions a user makes via the UTK token. UTRUST is a project of UTRUST Switzerland AG that fully sold out their ICO in November 2017 and now trades on major digital asset platforms such as OKEx, KuCoin or EthFinex.
- UTRUST platform: utrust.com
Nexo is a project of Credissimo, Bulgarian fintech company that is under EU banking supervision since 2007. The company is audited by Deloitte. The main product of Nexo for consumers is the crypto-backed credit card where users can borrow fiat currencies without the need to sell cryptoassets. Lending is possible only for accredited investors which can be private individuals or businesses such as crypto exchanges. The cryptocurrency storage is provided by BitGo.
- Nexo platform: nexo.io
PayPal Credit for Crypto Industry
What the partnership of UTRUST and Nexo brings about is the functionality of delayed payments for consumers making a purchase with their crypto assets on the UTRUST network. Essentially this is the equivalent of PayPal Credit.
“One of the barriers to cryptocurrencies’ mainstream adoption is inadequate payment infrastructure and merchant network, limiting consumers’ buying choices,” said Georgi Shulev, Nexo’s Managing Partner. “The partnership between Nexo and UTRUST intends to empower both buyers and merchants.”
Why Crypto-Backed Loans?
The concept of borrowing money with backing of crypto assets is not entirely new, same idea powers the now established market for loans backed by luxury items such as jewelry.
The alternative with cryptocurrency backing was anticipated to come around by legacy finance experts since Bitcoin started rapidly gaining value in 2017 and consequently alternative cryptocurrencies followed.
Last but not least there is also the ethos in the crypto community that one spends the fiat currencies and “HODLs” the crypto to retain the upside of the asset.
However, the availability of crypto-backed loans with Nexo has an important implication for the markets as well: An important type of clients interested in such loans are ICO companies and crypto miners who consequently don’t need to sell their crypto funds on the open spot market.
What UTRUST adds to this concept other than payment network with low transaction fees is also a much-needed consumer protection layer.
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