- Pawn shops in Ukraine decide to accept Cryptocurrencies as collateral
- Citizens can accept loans in exchange for any cryptocurrency they hold
- It is said to be released nationwide with immediate affect, will also abide by current regulations
A major network of pawn shops in Ukraine, Skarbnytsya, is launching a new lending service with loans secured by cryptocurrency. With over 300 branches, the pawnbroker plans to offer loans based on the type, amount, and price of crypto collaterals.
According to its website, the company has “millions of customers,” 1,200 employees, and currently operates more than 300 pawn shops, with “the highest standards in the non-bank lending market.”
Crypto for Real World Loans
“The implementation of this project is due to the rapid development of crypto and blockchain in the world. Our clients will be able to use the money and, at the same time, receive income from the growth of cryptocurrencies in the future.”
In essence, established cryptocurrencies like Bitcoin and Ethereum can be used to secure vast amounts of loans compared to other small volume cryptos. The company further explained that crypto owners can obtain loans in Ukrainian Hryvnia (UAH) for a period of up to 31 days, with the option to roll over the loans.
In the firm’s FAQ section, they made it abundantly clear that these loans will all remain within the boundaries of Ukrainian legislation.
The firm has even thought of long term issues like price drop and volatility. In the case of a particular steep drop in price, all parties are provided with a specific stop-loss by the loan firm:
“You will receive automatic e-mail and SMS notifications when the exchange rate drops by 20 [percent] and 25 [percent]. If the rate falls by 30 [percent] or more, your cryptocurrency will be automatically realized, and the funds received are directed to repayment of the loan debt.”