The crypto lending firm PawnHub will become the first operation of this type to receive proper licenses from local authorities. What’s more, PawnHub will partner with a notable US crypto custodian to provide up to $100 million of insurance coverage.
PawnHub receives crypto lending license
This news suggests that PawnHub now has the proper governmental go-ahead for its operations. As crypto firms are facing an increasing amount of regulations, this is more important than ever. Moreover, the company’s location allows it to service a multitude of bordering nations, including China, Singapore, Japan and South Korea.
PawnHub is a Hong Kong firm that provides financial loans with crypto backing. Put simply, this means PawnHub secures the loans by Bitcoin collateral, which it returns when the loan is fully paid back.
As such, clients are able to take financial loans without necessarily offloading their Bitcoin assets. Consequently, PawnHub facilitates loans directly against Bitcoin securities, meaning that they can a loan with the assets while still “hodling”. Put simply, PawnHub allows lenders to retain ownership of their crypto assets.
Crypto is a rapidly growing sector
Being the first crypto lending firm in Hong Kong with the appropriate licenses positions PawnHub for rapid expansion. Cryptocurrencies currently carry little to no financial leverage in the grand scheme of things. The cryptocurrency market has a debt-to-asset ratio of roughly 2%.
What’s more, PawnHub looks to profit off Bitcoin’s readily accessible nature. As growing cryptocurrency adoption drives greater financial freedom, PawnHubs loans may prove immensely popular.
For example, unbanked populations around the world may struggle to secure loans. Especially in developing nations, many entrepreneurs can face difficulties relating to their lack of an account, account or credit history, or a general lack of documentation.
PawnHub fills a hole in the existing financial infrastructure
This is in no way their own fault. Some parts of the world still lack the necessary financial infrastructure to provide the basis for a loan. This is where cryptocurrencies come in, and can provide a viable banking solution without the existence of banks.
Moreover, PawnHub is able to leverage this growing trend to provide financial loans with crypto backing. It is therefore not unthinkable that PawnHub could go on and provide loans to people that would otherwise struggle with securing a loan, despite having sizable crypto assets.
Additionally, PawnHub is also partnering with a leading US crypto custodian for insurance. Specifically, this custodian partner will provide up to $100 million of insurance coverage for PawnHub clients’ assets.
Rasmus Pihl is a writer for Toshi Times by day and an avid follower of the blockchain industry by night. Rasmus holds a Bachelor’s Degree in Marketing from the Gothenburg School of Business, Economics, and Law and runs a Swedish marketing consulting firm. Moreover, when he isn’t writing for Toshi Times, traveling, working or changing the world in some other capacity, Rasmus is more than likely caught up in postgraduate studies.