SALT Starts Offering Mobile Payments Option USDC as Loan Collateral Option
Having options is one of the great keys toward making better customer experiences, and oddly enough, SALT—a company that offers financial solutions connected to blockchain-related assets—is stepping up its own selection of options in terms of securing loans. Now, SALT—along with Circle, Coinbase, and the CENTRE Consortium—will accept USDC, or USD Coin, as collateral for loans.
For those not familiar with USDC, which isn’t hard given the sheer quantity of cryptocurrencies out there, it’s a securecoin that’s backed by the US dollar. Some here might note that, since the US dollar itself is a fiat currency not backed by anything—beyond, of course, the good faith and credit of the United States and the wealth generated therein—it’s not really backed by anything. That’s an issue for a currency policy debate, however, rather than a cryptocurrency discussion.
At any rate, USDC effectively functions like digitized dollars, which makes it a potentially very valuable blockchain tool to have on hand. It would function effectively like having the world’s reserve currency available in electronic format, authenticated by blockchain itself. Just for added credibility, Circle will stage monthly audits of the US dollar reserves backing USDC tokens, an effort supported by accounting firm Grant Thompson LLP.
Market volatility can have an impact on loan-to-value, and when blockchain elements are involved, there can be a lot of volatility. This can actually impact the value of collateral, which can be a problem for both lenders and borrowers alike. With USDC, however, a good chunk of this is removed since it’s pegged to the dollar.
Options are always good. With this, SALT can now collateralize loans in five different cryptocurrencies, or any combination therein. It now accepts bitcoin, Litecoin, Ethereum, and Dogecoin along with USDC, and that means users have that much more of an option. Options help keep users in the fold and bring new users in as well, so by expanding even just a little, SALT has opened up the field to gaining and keeping users.
Good news for SALT, and good news for its users, too. SALT may not have a lot of competitors in this space, but it’s demonstrating one more value of cryptocurrency: the ability to use what amounts to computer processes to collateralize loans.