Crypto-to-USD lender BlockFi has announced that it will support loans backed by both Litecoin and Gemini’s recent stablecoin token GUSD. This is the first time the company is expanding to accept collateral in one of the crypto industry’s top-10 assets besides bitcoin and ether. In addition, BlockFi is also the first crypto-backed lender to support loans backed by GUSD.
Founded in 2017, BlockFi offers both debt and credit products and seeks to bring liquidity to the cryptocurrency space. Based in New York, the company operates in over 40 states and is backed by some of the country’s leading financial firms including PJC and ConsenSys Ventures, as well as Galaxy Digital Ventures LLC, which provided the company with nearly $53 million in capital during a funding round in July 2018. This marked the first investment into crypto-backed loans from an institutional enterprise.
Zac Prince is the company CEO. Speaking with Bitcoin Magazine, he said that BlockFi’s acceptance of Litecoin was a “logical first step” toward supporting most — if not all — of the world’s top 10 cryptocurrencies.
“Litecoin was recently added to Gemini and has a long history of price appreciation,” he commented. “Having large, imbedded capital gains is one of the motivating factors for considering a loan backed by crypto. Litecoin also has strong liquidity with USD pairs in multiple trading venues.”
With the addition of GUSD, BlockFi can offer loan options to customers outside the standard business hours of 9-6 through an option that isn’t cash related. Speaking with Bitcoin Magazine, BlockFi’s director of customer operations, Abbey Young, explained, “Most banks have an outgoing wire cutoff time of 5:30 p.m. EST, so we can only send funds between the hours of 9 a.m.-5:30 p.m. EST during the week. However, if a client would like to be funded in GUSD, we can deposit those funds at any time, like weekends or after 5:30 p.m. EST.”
Gemini announced the coin back in September 2018 as an ERC-20, asset-backed token on the Ethereum network. It is supported by USD in a formal bank account where the GUSD deposit balance is examined monthly by public accounting firm BPM, LLP.
“Customers can apply [for funds] in less than two minutes,” Prince said. “The team will then evaluate the application and respond within one business day. Once accepted, the customer sends their crypto to a unique wallet address we generate for them. Then, we send them their funds. With USD, we wire the money directly into their bank account. For our GUSD customers, we can send it to any wallet address they like. This entire process often happens in as few as 90 minutes.”
The company is now designing plans that would enable more lending products supported by an assortment of differing cryptocurrencies to provide further, timely liquidity across the global crypto scene.
“We believe that the crypto asset market will continue to grow, and we are attracted to the promise of being able to deliver financial services on a more equitable and global scale rather than traditional systems,” Prince said.
This article originally appeared on Bitcoin Magazine.