Unleashing the full potential of a $600B crypto-ecosystem
Two FinTech innovators have joined forces to make it easier to invest in cryptocurrency. Gluwa and Aella Credit, two Silicon Valley backed companies, are teaming up to launch Creditcoin, an inter-blockchain P2P lending market.
Gluwa is the first Bitcoin-based payment platform built for everyday use, addressing cryptocurrency’s accessibility problem in the fiat currency ecosystem. Gluwa connects with cryptocurrency investors willing to take the volatility risk of the currency, and let businesses and customers use the currency without the volatility. Based in San Francisco, Gluwa has partnered with Innogy, a leading German electricity provider, and Seoul Auction Blue, the tech branch of the publicly listed auction company in Korea.
Aella Credit provides instant loans to Africans with a source of income verified by individuals or employers. Funded by Y Combinator, VY Capital, Zeno Ventures and other notable investors — including Brian Armstrong of Coinbase — Aella Credit provides financial services access to the underbanked. Gluwa and Aella Credit have partnered to be an adapter for $600 billion of capital sitting disconnected in separate blockchains.
Creditcoin establishes a blockchain-agnostic investment protocol where investors can lend in cryptocurrency. An investor (a lender in the Creditcoin network) and fundraiser (a borrower) find each other via the Creditcoin network. A fundraiser spends Creditcoin to make a loan offer with an amount and conditions such as interest rate to the Creditcoin network. Creditcoin functions as a reward for investors to accept more offers. While the traditional P2P market took a long time to establish lender-borrower trust, the Creditcoin network stores the credit history of fundraisers, helping investors make independent risk assessments.
Creditcoin addresses the two most significant problems of the traditional financial industry face: accessibility and trust. Traditionally, the lending market relied on third parties such as banks to facilitate the lending process: borrower and lender did not trust each other but had faith in the system to act as a substitute for that mutual trust. However, this also created an accessibility problem for people who have been financially marginalized: what can a person do when she can repay but is not accepted by a third party due to lack of credit history? Creditcoin addresses both of the problems by connecting borrower and lender directly via the blockchain. A fundraiser with the ability to repay can borrow capital by posting a higher interest rate and/or additional collateral. An investor can make informed choices about the offer’s risk and trust the credit history recorded permanently and accurately on the blockchain.
The lending market is one of the biggest finance subsectors, with a global market value that exceeded $100 trillion by 2013. Credit history works as the backbone of the market. To grow the cryptocurrency ecosystem, we need to build a lending infrastructure accumulating credit history in an inter-blockchain manner. That is the goal of Creditcoin.
To learn more about Creditcoin, visit creditcoin.org.
Thank you, Dana Yong and Akin Jones for your contributions.
