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XRP can now be used as collateral for $2 million instant loans

Anirudh VK



XRP can now be used as collateral for $2 million instant loans
Source: Unsplash

XRP has gained more utility as an asset in the greater asset class of cryptocurrencies, as it can now be used as backing for a loan of fiat money up to $2 million. This service is offered by a company claiming to be the world’s first instant cryptocurrency-backed loan service known as Nexo.

The platform is backed by prominent players in the space such as Michael Arrington and is powered by Credissimo, a leading European FinTech group providing financial services to millions across the continent. The service will effectively allow users to deposit their cryptocurrencies and digital assets to Nexo wallet and instantly allow a loan with no credit checks. This allows users to own 100% of their digital assets while having cash on demand.

No official announcement has been made by Nexo as of now. However, their platform shows that the asset can be utilized as collateral along with Bitcoin [BTC], Ethereum [ETH], Binance Coin [BNB], and the service’s native asset, Nexo Coin. The withdrawals and deposits are currently disabled.

The platform allows users to utilize XRP for a flexible credit line and 8% per year charges. Moreover, the service utilizes BitGo, a custody provider approved by the United States Securities and Exchanges Commission. The existence of Nexo provides a solution to tax problems, which is a prominent hurdle for cryptocurrency enthusiasts as well.

Currently, they are forced to pay capital tax on their gains when they cash out. However, the platform will allow users to utilize a method known as the “Zuckerberg Tax”, removing tax liabilities by converting selling into an overdraft, where users still have access to liquidity.

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Anirudh VK is a full-time journalist at AMBCrypto. He has a passion for writing and interest towards the future of blockchain technology and cryptocurrencies. He does not own any cryptocurrencies currently.