Japanese lender launches Bitcoin-backed loans of up to $6.2M

[Oshosondy]

Japanese lender CRYL has launched Bitcoin-backed loans of up to 1 billion yen ($6.2 million), allowing individuals and businesses to raise fiat currency without selling their BTC.

On Thursday, the company announced that borrowers can access between $6,200 and $6.2 million at annual rates of 3.5% to 7%. The loans carry collateral ratios of 40% to 60%. They run for one year and can be used for expenses, including taxes, business funding and property purchases.

You can read it on https://cointelegraph.com/news/japan-cryl-bitcoin-backed-loans-6-million
https://prtimes.jp/main/html/rd/p/000000001.000185286.html

I just copied and pasted the necessary part which I think is good as bitcoin adoption has continued till today. Was it Coinbase we read about last with bitcoin backed loan, more companies around the are also starting offering it.

[PX-Z]

40-60%? Well, that's pretty considerable knowing bitcoin may plummeted for several months or almost a year of bear season. But for someone who wants to loan with that ratio, although 3-7% annual interest sounds pretty small, but still i'd better wait and hold instead, except if you really need cash to run  a business for returns and be able to repay the loan.

[joniboini]

I wonder how good or bad this loan will be. Anyone with similar experience maybe can compare it directly? Still though, the number seems small compared to the number of hacked coins you heard on media every now and then.

Anyway, even if such loans are available in my are, I'm definitely not the market for that. I'm more comfortable getting enough funds on my own before doing anything risky.

[Churchillvv]

Small numbers big impact in when you take the loans, they upside seem beneficial to the borrower but in longer term it’s far more beneficial to the company, it’s a good one in terms of adopting this measure but however I prefer to take a on physical property than loan on my bitcoin. However I wonder how exactly they run this, you give them the bitcoin or access to the bitcoin investment until you're able to pay the loan. 

[JiiBs]

40-60%? Well, that's pretty considerable knowing bitcoin may plummeted for several months or almost a year of bear season. But for someone who wants to loan with that ratio, although 3-7% annual interest sounds pretty small, but still i'd better wait and hold instead, except if you really need cash to run  a business for returns and be able to repay the loan.

Obviously those that would want to take these form of loans are those that don’t want to sell their Bitcoin and would want to use fiat for something important, looking at the amount the loan amount being between $6k to $6m. That’s no small money but then, is the interest being paid with Bitcoin?
Or would this be coming of fiat as well.

What this goes to prove though is how valuable Bitcoin has come to be to serve in this capacity in our society, that would reinstate in the people that Bitcoin is indeed an asset of value.

[PX-Z]

... but then, is the interest being paid with Bitcoin?
Or would this be coming of fiat as well.

The loan repayment is in fiat including the interest, it doesn't make sense if they offer loan as cash/fiat for disbursement and then the payment is in form of bitcoin including interest. Its possible for lenders here but not on lending business irl. Bitcoin/crypto is only for collateral.

[X-ray]

40% to 60% collateral ratio means they want to play it safe and the annual rate is honestly pretty high compared to existing defi where we can borrow the stablecoins from with Bitcoin collateral.

But it's a good one step forward for Japanese lender to set precedent that they could accept Bitcoin which is great.

Biggest benefit would be the non taxable event.

[Rashlyowl]

I wonder how good or bad this loan will be. Anyone with similar experience maybe can compare it directly? Still though, the number seems small compared to the number of hacked coins you heard on media every now and then.

In my opinion, that would be a good loan backed by BTC, it offers an annual rate of 3.5% - 7%, which isn't vastly different from conventional loans in Indonesia, though those typically carry higher annual rates. With conventional loans, the bank only assesses our assets in the event that we ultimately fail to repay the loan. However, for this BTC loans, we are required to provide collateral ranging from 40% to 60% of the total loan amount.

The minimum loan is $6,200, this requires maximum collateral of 60% ($3,720 in BTC). If we fail to repay the loan within a year, that $3,720 in BTC will become $3,459 (in the event that the price remains unchanged), not a bad loan.

[AmoreJaz]

... but then, is the interest being paid with Bitcoin?
Or would this be coming of fiat as well.

The loan repayment is in fiat including the interest, it doesn't make sense if they offer loan as cash/fiat for disbursement and then the payment is in form of bitcoin including interest. Its possible for lenders here but not on lending business irl. Bitcoin/crypto is only for collateral.

The good thing here is that the lending company is of advantage because if the borrower can't pay, they have btc and the price can easily go up and they will get good profits out of it. So for me, it is still a win-win situation. However, the company should also monitor the market as we have no upper hand on this.

But if a lending company trusted btc as collateral just like real-estate or other tangible property, it means, they are already considering btc as a solid investment of our time. And I believe, a lot are already considering btc as such good digital investment.

[SuperBitMan]

... but then, is the interest being paid with Bitcoin?
Or would this be coming of fiat as well.

The loan repayment is in fiat including the interest, it doesn't make sense if they offer loan as cash/fiat for disbursement and then the payment is in form of bitcoin including interest. Its possible for lenders here but not on lending business irl. Bitcoin/crypto is only for collateral.

I don’t also like the idea of paying back a loan you took in a form of fiat currency in bitcoin, believe me this will make you send out all the bitcoin you have been accumulating, and if you are not very discipline, you will find it hard to continue your bitcoin investment, as for me, I will not use such a company that is giving such a condition, even if you are earning in bitcoin believe me, it will actually affect you in your bitcoin investment. The best is to pay back the same way you took the loan.

[Zlantann]

Small numbers big impact in when you take the loans, they upside seem beneficial to the borrower but in longer term it’s far more beneficial to the company, it’s a good one in terms of adopting this measure but however I prefer to take a on physical property than loan on my bitcoin. However I wonder how exactly they run this, you give them the bitcoin or access to the bitcoin investment until you're able to pay the loan. 

The lender gives them access to their Bitcoin as collateral for the loan. The asset would be worth 40% to 60% of the total amount that is being borrowed. It sounds good considering that the interest is not too high and you have the option of preserving your coins even when you need money urgently. But am concerned about the safety of this asset because it can be prone to hacks. These assets should be covered by insurance in case of emergencies. I am also concerned about the 20 percent annual penalty for late repayment.

This will be my last option to get funds if I have exhausted my emergency funds or there is a good investment opportunity.

[Spaceman1000$]

Japanese lender CRYL has launched Bitcoin-backed loans of up to 1 billion yen ($6.2 million), allowing individuals and businesses to raise fiat currency without selling their BTC.

On Thursday, the company announced that borrowers can access between $6,200 and $6.2 million at annual rates of 3.5% to 7%. The loans carry collateral ratios of 40% to 60%. They run for one year and can be used for expenses, including taxes, business funding and property purchases.

You can read it on https://cointelegraph.com/news/japan-cryl-bitcoin-backed-loans-6-million
https://prtimes.jp/main/html/rd/p/000000001.000185286.html

I just copied and pasted the necessary part which I think is good as bitcoin adoption has continued till today. Was it Coinbase we read about last with bitcoin backed loan, more companies around the are also starting offering it.

A loan access of 6,200 to 2 million in Bitcoin is really a big deal, accessing such amount of loan in Bitcoin is not cheap in any part of the world, so for anybody to come up with such idea, he needs to be applauded and encourage. But my worry is that, given the fact that Japanese is having some sort of laws that have try to control some of the activities of crypto in their environment, how easy will it be for this company to operate, giving the reality they have with their laws, I know Asian countries like China too have the same laws of wanting to control Bitcoin or cryptocurrency activity, I'm saying so because I believe that aspect of wanting to control the crypto activities will surely affect their business to an extent.

[Churchillvv]

Small numbers big impact in when you take the loans, they upside seem beneficial to the borrower but in longer term it’s far more beneficial to the company, it’s a good one in terms of adopting this measure but however I prefer to take a on physical property than loan on my bitcoin. However I wonder how exactly they run this, you give them the bitcoin or access to the bitcoin investment until you're able to pay the loan.  

The lender gives them access to their Bitcoin as collateral for the loan. The asset would be worth 40% to 60% of the total amount that is being borrowed. It sounds good considering that the interest is not too high and you have the option of preserving your coins even when you need money urgently. But am concerned about the safety of this asset because it can be prone to hacks. These assets should be covered by insurance in case of emergencies. I am also concerned about the 20 percent annual penalty for late repayment.

This will be my last option to get funds if I have exhausted my emergency funds or there is a good investment opportunity.

Exactly last option! All you concerns are very valid and same here, truth remains that we can’t always expect this to work 100% in the favour of the borrower but however. It sounds good but still very mind worrying when it comes to how I give them 60% of my asset which means I have totally given myself away, saying this is 60% of the asset I own from such data they can predict or estimate how much investment you have and such data can be used for both positive and negative outcomes but with legitimacy I guess it feels safe to give such information to them and then you concern about the safety of the asset in their disposal hacks should be their basic concern and probably have a protection or backup against much ugly incidents.

[rat03gopoh]

In my opinion, that would be a good loan backed by BTC, it offers an annual rate of 3.5% - 7%, which isn't vastly different from conventional loans in Indonesia, though those typically carry higher annual rates.

Japanese bank interest rates are notoriously low, hovering around 0.75% for decades, until recently raising to 1%. Therefore, this new lending system is still not as attractive as conventional loans there. If Indonesia is also targeted by lenders, I can say it's competitive compared to crypto-based lending platforms, some DeFi platforms offering interest rates as low as 3% and, of course, a more relaxed credit scoring process.

[TypoTonic]

Japanese bank interest rates are notoriously low, hovering around 0.75% for decades, until recently raising to 1%. Therefore, this new lending system is still not as attractive as conventional loans there.

Their current loan structure is also limited to a one-year term, with a lump-sum repayment of principal and interest. I don't think this would be ideal for most people, especially if they are borrowing large amounts. It would be better if they accept monthly or quarterly installment as well, and maybe they can allow multiple loan durations too (with lower interest for short-term loans). Having that kind of flexibility would probably make it more attractive to borrowers.

[Johnlomape]

What is the of taking a Bitcoin backed loan when the worth of the loan can either depreciate or appreciate over time.
It may become very hard for this kind of loan to be repaid if the price of Bitcoin increases too quickly allowing the worth of the loan to also increases. I will turn down this kind of loan if they give me as an offer. It doesn't worth it at all taking a loan using a digital currency that is very volatile. I don't know what the teams may be but I know it will always favour the company that is issuing the loan not the receivers of the loan.

[Hamza2424]

I just copied and pasted the necessary part which I think is good as bitcoin adoption has continued till today. Was it Coinbase we read about last with bitcoin backed loan, more companies around the are also starting offering it.

So I can use my bitcoin to take a loan! That's amazing. I mean it includes interest, but it is proof that banks are adopting bitcoin if they are giving loans in fiat by taking bitcoin as collateral. But it must be expensive because when a company in the US announced they were supporting mortgages backed by bitcoin, the real expenses were very high compared to normal mortgages.

The same could be true here due to the volatility of bitcoin.

The model is good, but it will work as long as you are not borrowing more against your bitcoin than you can afford to cover in situations where BTC pulls back significantly.