Helio, a Melbourne-based company is all set to issue loans backed by cryptocurrencies. Operating under an Australian Credit License (ACL) issued by the Australian Securities and Investments Commission (ASIC), the firm enables cryptocurrency holders to borrow fiat money and keep their digital coins as collateral.
The platform will accept four major cryptocurrencies, bitcoin core (BTC), ethereum (ETH), litecoin (LTC), and ripple (XRP). Helio Lending offers loans for up to 48 months and with an APR of between 17 and 24% depending on the value of the collateral. The consumer has the options of choosing 30, 40 or 50% loan-to-value (LTV) ratio.
For instance, if a user wants a 10,000 Australian-dollar loan with 30 % LTV, the borrower pledges 7.19 BTC as collateral. The APR on this case will be 17%, along with a monthly payment of 350 Australian dollars
To aid the calculation the Helio’s website features a calculator, that can produce different load configurations. The minimum amount that is borrowed is set at 1,000 Australian dollars. The email address of the user is validated before the application is processed, in order to signup the applicants must follow the confirmation link sent by the platform.
John O’Shea, the founder of Helio stated that his company is the first licensed entity in Australia to offer crypto-backed loans. According to him the market for digital assets in the country is quite massive. Some estimates infer that around $2.8 million daily cryptocurrency transactions are performed in Australia.
O’Shea told usinessbuyinvest.com, that there is a vacuum of service providers and companies, that are willing to support the ecosystem or offer loan against crypto assets. Thus he believes this as an opportunity to “capitalize on something that is so highly sought after, yet so underserviced.” He explained:
We provide finance to both individuals and businesses through cryptocurrency asset-backed lending. This means that clients who hold bitcoin, ethereum, litecoin or ripple are able to use their assets as collateral for loan financing.
Helio can rely on the digital assets transferred by its customers to a secured collateral wallet. The company can sell the coins to cover their losses in case of a default. All the while, the consumer is protected under laws and regulations by ACL and ASIC laws. Thus the ACL license will allow Helio to offer its client’s even more favourable terms in the future.