Cryptocurrency lending has the potential to take over the loans industry as we know it. In essence, it makes the process of getting a loan far easier and has far less requirements than traditional lending methods. However, for many, the idea of crypto lending still seems risky and in some ways, too good to be true.

Is crypto lending really that great? In short, yes! In this article, we’ll walk you through the many advantages of cryptocurrency lending and why you should consider crypto the next time you need a loan.

1. Crypto lending is more accessible

If you’ve ever applied for a loan at a traditional bank, then you know it’s a lengthy process. When it comes to traditional lending, your credit score matters and will determine how much money you are able to borrow. If you have a low credit score, you might not be able to get the funds that you require. There are several other factors that will also be considered, such as credit history and income.

Once you’ve found a bank that will offer you a loan, you will have to provide a wealth of personal information such as your social security number, proof of employment, bank statements, government-issued ID and more. Additionally, as a borrower you have little control over what the final loan terms are; the bank will dictate your loan amount and interest rate based on the above information.

Borrowing through a traditional bank can be a time-consuming process and nearly impossible if you have a low credit score or are unemployed. But what if you don’t have a bank account? Currently, 1.7 billion adults are unbanked, meaning that they have no bank account, which makes getting a traditional loan impossible. 

Cryptocurrency lending solves both of these issues. You don’t need a bank account and on the majority of crypto lending platforms, your credit score isn’t taken into account. Crypto loans have the power to help people get the funds they need when the traditional banks won’t even consider them. It makes getting a loan considerably more accessible than traditional methods and offers everyone financial freedom, which is why it continues to grow in popularity.

2. Crypto lending is faster

When borrowing from a bank, it can take anywhere from a few days to a few weeks for your loan to be approved. It is becoming more common for banks to approve loans on the same day, but it depends on a lot of factors. If you need a loan as soon as possible, obviously this presents some problems.

When it comes to cryptocurrency lending, most platforms will approve your loan within 24 hours. While confirming your ID is usually required, crypto lending platforms aren’t pouring over a stack of documents to determine if you are eligible or not. As long as you have cryptocurrency (or in some cases, fiat currency) that you can deposit as collateral and a piece of government-issued ID, you are eligible for a loan, which is why the process is so much faster. 

Some crypto lending platforms may take longer, especially if it’s a peer-to-peer (P2P) network that requires you to find a lender. P2P loans are not instant, and require cooperation between borrowers and lenders. If you want an instant loan, look into other platforms that don’t rely on a P2P network.

3. Crypto loans have more flexible loan terms

If you go to a bank for a loan, you don’t have much of a choice when it comes to your loan terms. The bank will ultimately determine your loan amount and interest rate, and while you can shop around at different banks, there isn’t going to be a big difference between financial institutions.

With cryptocurrency loans, the process is a lot more customizable. The borrower gets to determine how long they want their loan to be for, the loan-to-value ratio (LTV), and what fiat currency or stablecoin they want to be paid out in. The loan amount will depend on how much collateral you have, but the rest of the loan terms are pretty flexible, especially when compared to traditional banking.

Some crypto lending platforms have extremely flexible repayment terms. Some offer no minimum monthly payments as long as the loan is paid back in full by the end of the designated time. You can also find better interest rates; some platforms will offer a lower interest rate if you repay in a specific cryptocurrency.

Cryptocurrency lending platforms pride themselves on transparency, which means that the loan terms are clearly laid out and if there are any fees, they are clearly stated. When it comes to flexibility, crypto lending clearly surpasses traditional banking.

4. Crypto lending has lower fees

When it comes to fee structures, traditional banks are cumbersome. If you need your loan converted to a different currency for whatever reason, you’ll be hit with a large fee and a poor exchange rate. Ultimately, this means you are losing money, which kind of defeats the whole purpose of a loan.

With cryptocurrency lending, the fee structures are not only clearly laid out, but they are typically lower than those in traditional banking. There’s usually just a one-time service fee and that’s it. Additionally, if you need to be paid out in a different currency for whatever reason, you aren’t going to be hit by exorbitant exchange rates. So if, for example, you’re taking out a loan to help out a family member in another country, you can send the funds to them in their local currency or even as cryptocurrency to avoid high fees and a poor exchange rate at the bank.

The majority of crypto lending platforms provide you with options as to what currency you’d like to be paid out in. Some offer a combination of fiat currency and stablecoins, while others just offer cryptocurrency. Either way, you can always withdraw your stablecoins or crypto into whatever currency you need through an exchange. There are no limitations.

5. Crypto lending is safer

Many people think that their money is safe in a traditional bank. However, banks have been involved with nearly every major money laundering scandal in some way. Banks are run by human beings, who are naturally fallible, and often don’t have the best security measures in place, especially when it comes to technology.

Cryptocurrency lending seems risky to many because of the fact that it is simply a digital currency. However, crypto lending platforms are often far more secure than banks, simply because they have to be. The industry has actively been working to be more reputable, especially in terms of safety. In order for cryptocurrency to become mainstream, the world has to understand that it is just as safe, if not even safer, than keeping your money in the bank.

Any reputable crypto lending platform will clearly outline their security measures on their website. The best will go into detail as to how they protect your collateral. Ideally, 95% or more of user funds should be stored in cold wallets. This means that your crypto collateral is stored securely offline and is virtually impossible to hack. The best crypto lending platforms on the market store 100% of user funds in cold wallets.

Having a secure website is also paramount and any reputable platform will outline what securities they have in place to prevent things like DDoS attacks. Some cryptocurrency lending platforms go even further, and insure all digital assets on their platform. Securing your cryptocurrency is a priority for these platforms, as a failure to keep your crypto safe is a bad look for any crypto lending platform.

Conclusion - The advantages of cryptocurrency lending

While cryptocurrency lending is still relatively new to the loans market, it is making big waves and gaining popularity. As of January 2020, crypto lending has seen a boom in popularity which is expected to continue. The accessibility of crypto lending grants financial freedom to many, which has the potential to change the financial industry as we know it forever.

As a result, we’re excited to bring you the upcoming ESelfKey Loans Marketplace. The Loans Marketplace will grant ESelfKey Wallet users access to the world’s most exciting lending platforms and users will be able to easily compare and register for crypto lending services. This is an exciting prospect for the ESelfKey community and adds impressive new functionality to the Wallet.

If you want to start exploring the ESelfKey Wallet now, download it here and keep an eye out for the launch of the ESelfKey Cryptocurrency Loans Marketplace.

In this article, we explore why the United States is often left out by great crypto lending platforms, and how you can still get a crypto loan as a US citizen or resident.

Is crypto lending legal in the US?

In short, yes! However, the complete answer is infinitely more complicated. Many crypto lending platforms purposefully prevent US residents and citizens from borrowing and lending on their platforms. The reason for this is a little complicated, but worth diving into.

First of all, cryptocurrency and related crypto activities are perfectly legal in the United States, though it is not considered to be legal tender. The main problem the US faces regarding cryptocurrency is the lack of regulation, and this is why many crypto lending platforms steer clear. 

At the moment, there doesn’t seem to be a consistent legal approach to cryptocurrency in the United States. Laws vary greatly state by state, and federal laws can’t seem to agree as to what cryptocurrency actually is. For example, the Financial Crimes Enforcement Network (FinCEN) considers cryptocurrencies to be money transmitters, while the IRS regards them as property.

Cryptocurrency exchanges and crypto lending platforms also face much uncertainty when it comes to regulation. Several different regulators claim jurisdiction, and there has yet to be a cohesive approach. Policies vary greatly, which makes it a confusing market for many crypto businesses.

As such, a large amount of crypto lending platforms prefer to not get involved in the US market because it is too confusing. Many are choosing to stay away until more concrete laws and regulations are in place. Even US-based crypto lending platforms face struggles because the regulations vary state by state. For example, SALT Lending, one of the most popular crypto lending platforms and one of the few registered in the US, only offers their services in 46 states and some states have limited services. 

While the United States is making progress when it comes to crypto, it is far behind most modern countries. Part of the problem is that there is currently no dedicated government agency that sets crypto regulations in the US. 

Cryptocurrency loan taxation in the US

Another “turn off” for crypto lending, specifically when it comes to those looking to lend out their crypto to make a profit, is the taxation involved. As mentioned earlier, cryptocurrencies are considered to be property by the IRS, which essentially means it’s taxed like a stock. If you buy cryptocurrency and keep it for a year, you are required to pay long-term capital gains when you sell. For federal taxes, this means that you pay 15% tax on any gains.

In terms of crypto lending, a crypto lender has to identify if they are a hobby (or “self-employed”) or business lender for taxation purposes. There are a number of factors that determine whether a crypto lender counts as a hobby or business, and the taxation differs between the two.

For crypto borrowers, the taxation is more favorable. Depositing collateral, the payout of a loan, and the repayment of the principal are all non-taxable events. If a loan is for business purposes, interest payments can be deducted as an expense. However, if the loan is liquidated, then it will be treated as a sale and will have to be reported as a capital gain/loss.

How to get a crypto loan in the US

The first step is finding a crypto lending platform that offers their services in your state. Naturally, some states are far more accommodating than others when it comes to regulation, and you have a leg up if you live in one of these states. 

The top five states when it comes to cryptocurrency regulation are:

1. Wyoming - Somewhat surprisingly, Wyoming is the undisputed leader amongst the US states when it comes to crypto. In 2018, a bill was passed that defined “utility tokens” and exempted most of them from securities regulations. Digital assets have the same legal status as money, and banks are also allowed to store and administer digital assets.
2. Colorado - Taking a similar approach to Wyoming, Colorado is very welcoming to crypto. Additionally, the state is one of the few to make use of blockchain technology. The state government has rolled out a number of initiatives aimed at protecting the identity and personal information of residents through the use of blockchain.
3. Ohio - While not as advanced as the two prior states on this list, Ohio has made some impressive strides. The state legally recognizes blockchain data and has big plans to use it to protect the identity and personal information of residents. Ohio has made another impressive step in that businesses can pay taxes in cryptocurrency.
4. Texas - The first state to publish a memorandum declaring that no money transmitter license is needed to sell digital currencies, Texas has made big strides but still has a long way to go. In fact, the state was on the verge of passing a bill that would have banned the usage of cryptocurrencies between unidentified parties earlier this year. Despite all of that, Texas is a hub for Bitcoin mining and is one of the most stringent when it comes to noncompliance.
5. California - Amongst the first states to legalize crypto, California is home to some of the largest crypto companies such as Coinbase, Kraken, and Ripple. The state isn’t exactly at the forefront of crypto regulation, but is making big improvements. For now, the lack of regulation seems to be a bit of a blessing in disguise, as local businesses aren’t hamstrung by overly restrictive measures. 

If you don’t live in one of the above states, fear not. Crypto lending is on the rise, and many states do welcome it. Your best bet is to look for a crypto lending provider that is based in or operates out of the United States. Platforms such as SALT Lending, Unchained Capital, and BlockFi all allow US citizens to use their platform, although it may vary from state to state.

Once you find your preferred crypto lending platform, the process to get started is relatively simple. For borrowers, you will need to determine how much you want a loan for and how long you want the loan terms to be. Once you have selected your loan terms (on many platforms it’s completely customizable), your loan will be sent for review and then approved, sometimes within 24 hours. From there, typically you will be required to deposit some of your own cryptocurrency as collateral before receiving a loan. As a lender, the process can be even simpler. You will need to agree to the terms, deposit your crypto on the platform, and then start earning interest. 

Most crypto lending platforms will require that you verify your identity before getting started on their platform. However, most platforms do not require a credit check, which is part of what makes crypto lending so accessible.

As always, you should do your due diligence before committing to any platform and make sure you understand how the platform works. Any platform that is worth its salt will clearly outline the process and loan terms before you join. If you’re newer to crypto lending, check out our Introduction to Cryptocurrency Lending article to start your journey.

Conclusion - Crypto lending in the US

Crypto lending is on the rise, which is great news and gives hope that the United States will begin to catch up with the rest of the modern world. However, there is still a long way to go. In March of this year, a bill was proposed that aimed to provide a federal framework for cryptocurrency regulation, however it seems to be dead in the water. Additionally, part of the initial drafts of the CARES Act included the introduction of a digital currency, but the idea was ultimately shot down.

For US citizens, it's inevitable that the situation will eventually improve. Even without countrywide legislation, crypto lending is about to get a lot easier for US citizens and residents with the introduction of the ESelfKey Loans Marketplace. The Loans Marketplace will grant ESelfKey Wallet users access to the world’s most exciting lending platforms and users will be able to easily compare and register for crypto lending services. This is an exciting prospect for the ESelfKey community and adds impressive new functionality to the Wallet.

If you want to start exploring the ESelfKey Wallet now, download it here and keep an eye out for the launch of the ESelfKey Cryptocurrency Loans Marketplace.

What is a cryptocurrency borrower?

A cryptocurrency borrower is someone who is looking to take out a cryptocurrency loan. A borrower can be looking to take out a crypto loan for a variety of reasons. They could be looking to margin trade, take out a loan for their business, help fund a downpayment for a house, pay off other debt, or a variety of other reasons. 

Typically, there are two ways someone can borrow. The first is that a borrower can use their crypto as collateral and be paid out in fiat currency or stablecoin. The second is that a borrower can use fiat or stablecoins as collateral for a crypto loan, which is more common for activities like margin trading.

What is a cryptocurrency lender?

A cryptocurrency lender is someone who is offering up their cryptocurrency for loans. Lenders typically agree to loan as they are paid interest, and it’s a good way to make use of their crypto while still holding onto it. 

There are two different ways that someone can lend out their cryptocurrency. The first is a peer-to-peer lending platform, where lenders and borrowers are matched based on the terms of the loan. The second is that the lender’s crypto is added to a pool of funds. This means that lenders can start earning interest right away, don’t have to worry about finding a borrower, and their crypto is typically very well protected by the platform.

What does collateral mean in cryptocurrency lending?

In cryptocurrency lending terms, collateral means using crypto, altcoins, stablecoins, or fiat currency as a safeguard or warranty against the loan. That way, if a borrower fails to pay back their loan, the lender and the platform haven’t lost the value of the loan. Collateral also ensures that the borrower is more likely to pay back their loan in the first place.

Typically, collateral in cryptocurrency lending is in the form of cryptocurrency. Generally, a collateralized loan will have a much lower interest rate than a non-collateralized loan. Once a loan is fully repaid, the borrower will receive their collateral back in the wallet or account of their choosing. 

On most platforms, the most popular cryptocurrencies, such as Bitcoin and Ethereum, are accepted as collateral. Other platforms offer more niche altcoin options, but the interest rates may be slightly higher depending on the altcoin. A few platforms let you use fiat currency or stablecoins as a collateral for a crypto loan, but there aren’t many platforms like this currently on the market. 

What does principal mean?

Principal can refer to a number of different things, but in crypto lending terms, it refers to the original sum of money that was borrowed. You’ll often see it mentioned in the terms of a crypto loan; it will typically state the borrower has to pay back the principal plus the agreed upon interest. 

The amount of interest a borrower pays is typically determined by the principal. Generally a higher principal means a higher interest rate. In crypto lending, other things that can affect the interest rate are the Loan-to-Value ratio (LTV), the type of collateral, and in what cryptocurrency the loan is being paid back in.

What is liquidation in cryptocurrency lending?

A liquidation occurs when a borrower fails to pay back their loan within the specified loan terms. The platform then liquidizes the crypto that has been held as collateral in order to pay back the lender or the pool of funds. Usually, a platform gives plenty of notice before this happens, and it is clearly laid out in the loan terms.

Although liquidation is an unfortunate part of cryptocurrency lending, it is an important one. It lets lenders know that their crypto is being taken care of, and that the platform is ready to step in if a borrower defaults. Additionally, it deters borrowers who are looking for fast cash and have no means to repay the loan, which is why they have to use crypto as collateral.  As crypto lending platforms generally do not perform credit checks (which is one of the benefits of crypto lending), taking collateral is a way to ensure repayment if a borrower defaults.

What is Loan-to-Value ratio (LTV)?

Loan-to-Value ratio (LTV) is a financial term that is used in traditional banking and in cryptocurrency lending. It’s a term used by lenders to express the ratio of the loan to the value of the collateral. In crypto lending terms, LTV is pretty important as it is tied to the value of the collateral.

Typically, a higher LTV means that the crypto used for collateral is worth less. Some cryptocurrency lending platforms allow you to choose the LTV so that you can still get funds with less collateral. However, a higher LTV is also higher risk, so the interest rate is usually higher.

Additionally, the LTV may fluctuate over the course of your loan depending on the price of your chosen collateral cryptocurrency. As the price of crypto is constantly fluctuating, so does the LTV. When your crypto is worth more, the LTV will go down; when it’s worth less, the LTV will increase. As a result, some platforms will require that you deposit more collateral or repay your loan if the LTV reaches a certain percentage.

How are cryptocurrency loans repaid?

Paying back a crypto loan is usually pretty straightforward, but the process does vary from platform to platform. Typically, monthly payments need to be made, and in some cases, are automatically withdrawn from your account. Some crypto loan platforms will offer you a lower interest rate (and therefore, lower monthly payments) if you pay the loan back in a certain token. For example, Bankera offers better interest rates if you pay back a loan in their native token BNK. Additionally, most platforms accept early repayments, but double check that there aren’t any added fees for doing so.

As for which currency a loan needs to be repaid with, this varies depending on the platform. Normally if you are borrowing fiat currency or stablecoins, you will need to pay back the loan in fiat or stablecoins plus the agreed upon interest rate. A good rule of thumb is that you repay with whatever cryptocurrency, fiat currency, stablecoin or altcoin you borrowed in.

The terms for repayment are clearly laid out in the terms of the crypto loan, and the platform you choose should clearly outline it for you. If you are late to repay, you may be penalized with a higher interest rate, or in extreme cases, have your collateral liquidated. For example, Binance Loans only gives you three days before they liquidate your collateral. Make sure you understand the penalty for late or defaulted payments on your chosen platform before you apply for a crypto loan.

What is a good interest rate for cryptocurrency lending?

Interest rates vary greatly across the different crypto lending platforms, and it also depends on whether you are a lender or a borrower. The average interest rate for lenders is around 8% for stablecoins, which is far better than a standard savings account at a bank. This is why crypto lending has become so popular, because it allows crypto holders to earn money while holding onto their assets. However, beware of platforms that offer interest rates that seem too good to be true, because they generally will be.

As for borrowing, interest rates range greatly. It mostly depends on what type of cryptocurrency you use as collateral. As mentioned earlier, some crypto lending platforms offer a lower interest rate if you repay the loan in a specific cryptocurrency, altcoin or stablecoin. Do your due diligence on the interest rates offered by different platforms if you’re planning to take out a crypto loan.

Conclusion - Crypto Lending 101

While cryptocurrency lending is constantly evolving and still very much in its infancy, this article outlines all the basic terms you need to know to effectively explore the world of crypto loans. As always, make sure to do your due diligence before you start lending or borrowing. While there are dozens of great crypto lending platforms available, there are also some less than favorable ones.

If you’re looking to explore the world of crypto lending, we have a new addition coming to the ESelfKey Marketplace. Our next release is the ESelfKey Cryptocurrency Loans Marketplace where ESelfKey Wallet users can get access to the world’s most exciting lending platforms and use cryptocurrencies as collateral to withdraw fiat loans. This is an exciting prospect for the ESelfKey community and adds impressive new functionality to the Wallet.

If you want to start exploring the ESelfKey Wallet now, download it here and keep an eye out for the launch of the ESelfKey Cryptocurrency Loans Marketplace.

In this article, we walk you through our newest Marketplace and all of the great exchanges that are listed. Here’s how to get started.

Disclosure: Some of the links in this article are affiliate links; we may receive a commission for purchases made through these links at no cost to you.

How to open a crypto exchange account

We specifically designed this process to be as easy for you, the user, as possible. Our aim is to provide clarity and transparency throughout the entire user experience, and you’ll see how that is reflected in our process.

Step 1: Download the Wallet

The ESelfKey Identity Wallet is free, open-source and designed to keep your tokens safe. That being said, it offers a lot more than a simple cryptocurrency wallet. Instead it allows you to manage your identification documents and provides access to the Self!Key Marketplace where you can open bank accounts, incorporate your business abroad, and more. 

Head over to this page and download the wallet on Windows, Linux or Mac OSX. You can also download the ESelfKey Wallet on your smartphone by visiting the above page. Whether you’re on your computer or your phone, the wallet is free and light-weight, meaning you’ll thoroughly enjoy using it. Of course, you own your private keys and can even access the Wallet using Ledger and Trezor.

Step 2: Set up your Wallet

Setting up your wallet couldn’t be easier, but it’s a very important step. As a result, it’s vital to make sure you do it correctly. The first thing you need to do is securely store your public and private keys. As a non-custodial Wallet, ESelfKey cannot recover your private key, so make sure you don’t lose it. 

Step 3: Complete your ESelfKey ID (optional)

Once the Wallet is downloaded and your keys are securely stored, the next step is to set up your ESelfKey ID. This is a collection of locally stored Know Your Customer (KYC) information used to quickly access new service providers. Thanks to the ESelfKey ID, you can reuse the same KYC data multiple times. So instead of having to go through many different sign-up processes within the Marketplace, you simply complete your ESelfKey ID once and then use it whenever you need it.

This feature will be coming soon to our Exchanges Marketplace. Once it is in effect, if you want to join multiple crypto exchanges, you simply complete your ESelfKey ID once and then use it for all registrations.

Step 4: Find your preferred exchange

Now that your ESelfKey ID is set up, it’s time to head to the ESelfKey Marketplace and check out the different crypto exchanges on offer. When logged into the Wallet, click on the Menu in the top right of your screen and select “Marketplace”. 

Six different Marketplaces should now appear, with one clearly being for exchanges. Click on the button to see a screen similar to this one: 

To learn more about each, make sure to click on “Details” and peruse the individual listing pages. We’ve endeavoured to give you all the relevant information, but please make sure to do your own research as well.

Here you can see an example for one of our exchanges, Bitpanda:

As you will be able to see, information such as exchange location, fees, if KYC is required, excluded residents, if fiat currencies are accepted, and more, are all clearly laid out. This way it’s easy to see which exchanges meet any criteria you have, and which exchanges you are eligible to join. 

Step 5: Sign up

Once you’ve decided which exchange you’d like to join, simply click on the “Sign Up” button on the top right. From there, you’ll be directed to the exchange’s website where you’ll need to register for a new account and follow the instructions they provide. You may need to confirm your identity for KYC purposes, so make sure to have a piece of government-issued ID on hand.

And that’s it, you’re all signed up for your new crypto account!

Featured crypto exchanges

We have over twenty different crypto exchanges listed in our Exchanges Marketplace. While we recommend that you take a look at all of the ones we have on offer, here are some of our featured crypto exchanges:

Hotbit

After a successful launch in 2018, Hotbit has been steadily growing. The crypto exchange offers one of the largest markets for trading, with over 500 different trading pairs available. Hotbit boasts over 500,000 active users from over 170 different countries. Hotbit is registered in both Estonia and Hong Kong. Fees are lower than average for both takers and makers at 0.1%

WhiteBIT

WhiteBIT is a centralized crypto exchange based in Estonia that offers not only crypto-to-crypto transactions, but also crypto-to-fiat. Having both European Exchange and Custody licenses, the exchange meets all AML and KYC requirements. Fiat currency in USD, EUR, RUB, and UAH are supported. Fees for makers and takers are relatively low at 0.1%

p2pb2b

Operating out of Estonia and licensed by the relevant authorities in the EU, p2pb2b is an advanced cryptocurrency exchange that is all about its users. The exchange offers 24/7 support in eight different languages, and has an optimized user interface to make your experience more pleasant. The exchange has a strong focus on security: over 95% of user assets are stored in cold wallets, making them far less vulnerable to hacks.

ProBit

Based in South Korea, ProBit offers enhanced security and a cutting edge trading engine. The exchange only lists what it deems to be qualified and deserving cryptocurrency projects, and reportedly has an order matching speed of over 1.5 million orders per second. ProBit offers a totally customizable dashboard, which makes it easy to use for beginners and perfect for professional traders too.

ExMarkets

While ExMarkets is smaller than some of the other exchanges, it offers a great experience to its users. Powered by a proprietary, state-of-the-art trading engine, users can set up an account in minutes and begin buying and selling crypto and some fiat currencies. Users can also access the token sales of promising blockchain and crypto projects through ExMarket’s IEO LaunchPad.

SimpleSwap

SimpleSwap is an instant cryptocurrency exchange that allows customers to swap crypto in an easy way. The platform is free from sign-up and supports more than 300 cryptocurrencies. SimpleSwap provides two exchange types: floating and fixed rate. SimpleSwap has made the cryptocurrency exchange process simple, safe and comfortable

Bitpanda

Based in Austria, Bitpanda is a fintech platform that offers a number of services including the Bitpanda Global Exchange. The Bitpanda Global Exchange already has over one million users and offers state-of-the-art performance with a strong focus on security to ensure that your crypto stays safe. The exchange offers a wide range of payment and payout providers for added flexibility. Bitpanda’s advanced trading platform and digital asset exchange is perfect for experienced traders, professionals and institutions.

Tokens.net

Based in the United Kingdom, Tokens.net is a cryptocurrency exchange operating in a stable and reliable business environment managed by industry pioneers with proven track records. The Tokens.net platform represents a distinctive trading engine with a user-friendly interface, assuring 100% trading volume transparency and fast execution. The primary function of the exchange’s native DTR tokens is providing real-time information on the number of transactions and transparent trading volume. 

Zipmex

Headquartered in Singapore, Zipmex currently operates in Indonesia and Australia and recently launched operations in Thailand. The crypto exchange focuses on fast trades, low buying prices, speed, and high liquidity. The exchange has been engineered to deal with high trading volumes, resulting in low prices for users. 

Mine Digital

Launched in 2019 with offices in Brisbane and Sydney, Mine Digital is a digital asset exchange and brokerage firm. The brokerage side of Mine Digital provides tailored advice and access to investment opportunities thanks to its highly experienced team. The Mine Digital exchange allows users to trade crypto and fiat currency pairings on a state-of-the-art platform, with low fixed fees and insured custody for added security.

Conclusion - The ESelfKey Cryptocurrency Exchange Marketplace

As you can see, signing up for a crypto exchange account through our Exchange Marketplace is a simple and straightforward process. We encourage you to experience the marketplace for yourself and check out the many exchanges we have on offer. We’re certain that we’ve got an exchange that meets all your criteria!

As always, we advise you to do your own research about any crypto exchange that you’d like to sign up with. We’ll continue to add more crypto exchanges over time, so keep an eye out for new announcements regarding the Exchanges Marketplace.

While trading cryptocurrencies is now pretty mainstream, it is not the only way to earn a profit. The crypto market offers several other investment tools, and digital currency lending is on the rise. It allows borrowers and lenders to transact money with good interest rates, low fees, and a sufficient level of safety.

As the popularity of crypto lending has increased, traditional financial instruments have begun to make their way into this emerging market. Crypto users can now make use of margin lending, crypto-to-fiat lending, and crypto-to-crypto lending for a multitude of purposes. In this article we cover how crypto lending works, and the three best crypto lending platforms that are currently on the market.

How crypto lending works

The process of crypto lending is pretty straightforward on most platforms that offer it as a service. Lenders deposit part of their crypto holdings onto the platform, and the coins are then made available to borrowers at a pre-established interest rate. Borrowers can then take out a loan for an agreed upon period of time. Once the lending time has ended, the borrower must return the funds and pay the interest rate.

In order to help mitigate risks (such as borrowers being unable to pay back their loans) and increase trustworthiness, most crypto lending platforms have guarantees, or set up collateral or loan backing systems. Some platforms hold onto a borrower’s cryptocurrency as collateral for their loan, meaning that you don’t lose your crypto unless you default on your payments.

There are two primary reasons why borrowers make use of crypto lending: to cover day-to-day expenses or for margin trading. Day-to-day expenses are self-explanatory; they cover the basic costs of living or business expenses. Margin trading means that the borrowed funds are used to make riskier and higher value trades. If a proper trading decision is made, the trader receives a higher profit, but in the case of a bad deal, the trader will have to pay back the losses out of their own pocket.

Unlike a traditional bank loan, crypto lending is mostly peer-to-peer (P2P). This means that users are borrowing directly from each other instead of a financial institution or the lending platform itself. Crypto lending platforms set the interest rates, lending times, and any other terms in addition to enabling the transactions. Some platforms simplify the process further and supply the loan amount from their own stored funds so that borrowers don’t have to find a lender.

Crypto lending has several advantages compared to traditional lending, which are the following:

• Extremely low transaction fees, especially when compared to banks
• No need for a bank account (1.7 billion adults are currently unbanked and crypto lending is sometimes their only option for a loan)
• Quick approval times
• Reduced bureaucracy and conditions
• Diversified loans
• Very few limits on what services can be used based on factors such as citizenship or nationality

Naturally, there are risks associated with crypto lending and these include:

• A higher default rate on loans, especially when compared to fiat loans
• Lending platform safety
• The volatility of the cryptocurrency market which can lead to borrowers having to pay back more than they originally borrowed and lenders potentially losing profits

As you can see, crypto lending offers a number of benefits, but there are risks too. It’s important that you do your due diligence and have a good understanding of the cryptocurrency market.

The best crypto loan platforms

The popularity of crypto lending has been steadily rising. As such, there are lots of options available for those interested in using their crypto for loans. Naturally, different loan platforms offer different benefits. Some have the lowest interest rates, others are focused on safety and security. The three following crypto lending platforms are the ones we think are the best on the market.

1. CoinLoan

Based in Estonia, CoinLoan is a P2P lending platform for crypto-collateralized loans. Since launching in 2018, it has become one of the most popular European crypto lending platforms. With a simple lending process backed by bank-grade security, it’s easy to see why. Additionally, CoinLoan offers one of the largest choices of cryptocurrencies, fiat, and stablecoins.

CoinLoan’s lending process is simple. Borrowers deposit a specific amount of cryptocurrency as their collateral for the loan. Additionally, the platform is incredibly transparent. Prior to borrowing, potential debtors are presented with the exact numbers for the lending contract. CoinLoan offers borrowers the added benefit of being able to preserve their crypto assets with flexible lending conditions, no credit checks, and convenient withdrawal methods.

As for lenders, CoinLoan offers several guarantees. The platform is registered and licensed in the European Union and is, therefore, subject to EU financial law which offers unparalleled protections for consumers. Repayments are guaranteed, and all transactions are SSL-encrypted. In fact, since opening in July 2018, every lender has received their repayments in full and on time.

Here at ESelfKey, we certainly see the amazing potential CoinLoan has to disrupt the loans industry, which is why we entered a comprehensive partnership with them this year.

2. YouHodler

With offices in Cyprus and Switzerland, YouHodler is a fintech platform focused on crypto-backed lending with fiat, crypto, and stablecoin loans. However, the platform offers so much more than just crypto loans. The Turbocharge service allows users to borrow additional crypto and use it as collateral for other loans. Multi HODL allows users to boost their savings by making small, speculative investments with crypto. YouHodler also offers a cryptocurrency wallet app available for iOS and Android smartphones.

The lending features on YouHodler are pretty similar to most of its market competitors. However, it does have the advantage of a high and flexible Loan-to-Value (LTV) rate, which is available at 90%, 70%, and 50%. As a result, users can obtain a higher credit line for a lower deposit. Loan management solutions are also available, including the option to increase the LTV, borrow additional crypto, and more.

Another major advantage is that YouHodler offers its users access to instant cash, which is provided by the platform’s fiat-base funds. Unlike P2P crypto lending platforms, there is no need to find a creditor. Additionally, the platform prides itself in transparency, meaning there are no hidden fees.

The platform takes a different approach from most crypto platforms; YouHodler works with the banks instead of avoiding them. This allows YouHodler to partner with trusted fiat payment providers and hold its fiat funds in the most reputable banks in Europe to ensure their safety.

3. SALT Lending

One of the few platforms registered in the United States, SALT Lending was one of the first crypto lending platforms to hit the market back in 2016. It has a great reputation, and one that it has certainly earned. SALT Lending offers P2P crypto-backed loans. Similar to the other platforms we’ve listed, the platform allows users to use crypto as collateral for their loan.

The process for getting a loan is very straightforward. Users can be verified the same day, and don’t need to undergo a credit check. The terms of a loan are completely customizable, from LTV to loan length. SALT Lending also operates in over thirty jurisdictions (including 46 US states), which is one of the most comprehensive when it comes to availability.

When it comes to security, SALT Lending is top level. All loans are backed by assets that have been insured and all crypto assets are held in cold wallets. Additionally, all digital assets are covered by insurance in the event of theft or fraud. These protections should be industry standard, and SALT Lending sets the bar high for competitors when it comes to security. 

Conclusion - The upcoming ESelfKey Cryptocurrency Loans Marketplace

Currently, there is no aggregated list of crypto loan platforms. If you are interested in crypto lending, you have to do a lot of research yourself. However, the future is about to change. Here at ESelfKey, we offer a number of different marketplaces to users of our ESelfKey Wallet. We have marketplaces for incorporations, bank accounts, and cryptocurrency exchanges, with more on the way.

Our next release is the ESelfKey Cryptocurrency Loans Marketplace where ESelfKey Wallet users can get access to the world’s most exciting lending platforms and use cryptocurrencies as collateral to withdraw fiat loans. This is an exciting prospect for the ESelfKey community and adds impressive new functionality to the Wallet. We already have some great platforms on board, such as CoinLoan, and more will be joining. 

If you want to start exploring the ESelfKey Wallet now, download it here and keep an eye out for the launch of the ESelfKey Cryptocurrency Loans Marketplace.