The cut in the interest rate of the United States Federal Reserve (Fed) has led to an increase in the demand for cryptocurrency loan services. Blockchain-powered lending platform Figure Technologies experienced a triple increase in loan applications.
Last Tuesday, the Fed cut interest rates 0.50% to a target range of 1.00% to 1.25%. For many cryptocurrency lending apps, it was a huge boost.
Figure Technologies, which leverages the blockchain to transform the cryptocurrency lending market, said it had seen a 300% increase in loan applications in the past week. Therefore, the total amount of loans that the company has financed reached $ 1 billion.
Figure co-founder and CEO Mike Cagney commented:
“The 300% increase in applications suggests that consumers are eager to take advantage of record low rates on mortgages, HELOC, and student loan refinancing. Consumers will benefit through lower debt costs and, for cash withdrawal refi and HELOC, more cash available. ”
Cagney, who also founded the personal finance firm Social Finance (SoFi), said that Figure was the first fintech "de novo" to reach $ 1 billion in loans financed so quickly. He explained that the company's success was guaranteed thanks to its proprietary blockchain platform Provenance, which focuses on cryptocurrency lending solutions.
Meanwhile, fundamental factors such as the Fed's decision to ease monetary policy are encouraging consumers to borrow more. The central bank is trying to curb the effect of the coronavirus epidemic.
Figure said the average size of loans applied after the Fed rate cut is approximately $ 50,000 per household.
Blockchian.com has launched a new loan service
While not necessarily related to the Fed move, Blockchain.com, one of the leading providers of cryptocurrency wallets, launched Borrow. The latter is a new product that allows users to borrow stable, dollar-denominated coins against cryptocurrencies, including Bitcoin, found in their wallet.
Peter Smith, co-founder and CEO of Blockchain.com, commented:
“Institutional and retail investors have the same financial goals: to increase wealth and manage risks, but the tools at their disposal are very different. Now, with our suite of trading and loan products, retail users can trade like the big boys without selling the cryptocurrencies they stored or left their wallet. ”