ZebPay, the Ahmedabad-based cryptocurrency exchange, has launched the ZebPay Lending Platform, allowing people to use their crypto assets as collateral for loans and investors to earn interest.
The idea is to convert crypto assets—which are highly volatile—into more stable investments.
The new lending platform will enable ZebPay users to invest their cryptocurrency assets in fixed deposits-a popular investment method in countries like India. Customers can earn a guaranteed fixed interest rate on their deposited sum without any risk of capital depreciation.
Additionally, it is an investment platform that enables cryptocurrency investors to earn interest in their holdings. An investor can open a fixed deposit. The interest income on such deposits will be credited to the investor’s ZebPay account. This interest payment can then be withdrawn from your linked bank account in INR or BTC.
ZebPay has created an all-in-one solution for Indian crypto users to buy, sell, store and transact in cryptos. With the new ZebPay Lending Platform, they’re allowing crypto users to diversify their profits even further by making their existing cryptocurrency holdings do all the work.
This is a unique platform that will allow you to take a loan against your existing investments, or grow your portfolio by lending crypto to those who need it and earn interest.
You can now fulfill your dreams faster than you ever imagined. Plus, it uses encrypted rate-adaptive lending to deliver better returns than a traditional fixed deposit and allows investors with small sums of crypto to get great returns without the risk of price volatility.
Deposits will be based on the value of digital assets and will be repaid in fixed monthly installments. This functionality is made possible thanks to new features introduced into the latest update. ZebPay users will be able to define the amount they want to invest and the duration of the deposit. The platform offers flexibility by allowing investors to make deposits for both a defined fixed term or for open-ended periods.
Impact of this Decision
ZebPay aims at using the newly launched product to attract investors desiring not just exposure to crypto-assets but also to earn stable returns on their investments.
However, there are some drawbacks. While ZebPay proposes using real-time data from exchanges for maturity payments, it is still unclear if it will provide principal protection in case of a market crash.
Furthermore, Crypto markets in India have been taking a beating following the unending regulatory limbo. The government is still uncertain about the economic effect of cryptocurrency. They have emphasized the need for a transparent mechanism to handle crypto trading and identify its users. However, since it has done an excellent job in leveling the playing field among Indian industrialists, there have been delays in implementing regulations.
However, the crypto segment is already witnessing considerable interest over the last couple of months. We believe the fixed deposits will expand this interest exponentially as it provides both the opportunity to earn more on one’s investment and learn the basics of trading in cryptocurrencies.
Given that the average tenure of fixed deposits is anywhere between 1-3 years, the industry expects to see a lot more traction here once these products gain initial momentum and stabilize.
For this reason, ZebPay added that it is taking small steps towards a larger goal of building financial infrastructure for crypto assets-to revolutionize the loan market.
This moves towards utilizing cryptocurrencies as collateral for loans, where the loan amount is paid out in both crypto or other currencies. Zebpay says they will continue to innovate and find new products to make it easier for people to use cryptocurrency in their day-to-day transactions.