ARS-denominated DeFi Loans are here! After integrating Chainlink as its sole oracle provider, RCN is releasing the first of several new features made possible by its wide Price Feed network. This new alternative will allow borrowers to request funds in Argentine Pesos, making it the first fiat-oriented borrowing solution in the DeFi ecosystem.
The new loans are already available on the Credit Marketplace’s Borrow Section with the following terms:
- Borrow in ARS.
- Collateralize in USDC & RCN.
- 40–80% Annual Rate (APR) in ARS.
- Any amount.
- 15 to 90 days duration.
- Optional 15-days instalments.
- 200% Minimum Collateral Ratio (LTV).
- Withdraw and repay funds in USDC.
If you don’t know how to borrow a loan, adjust its collateral or repay it, you can find a step-by-step tutorial here!
DeFi for the Rest of the World
The Argentine Peso (ARS) is the national currency of Argentina and one of the almost 30 different currencies used in Latin America and the Caribbean, a region with more than 650 million inhabitants where barely 51% of all adults have access to accounts in formal financial institutions. While this figure has shown recent growth with the adoption of more technology-driven financial solutions, it is still well below the 91% reached in high-income economies, or even the world average of 61%.
This lack of access to financial services — including digital payment systems, savings accounts and, most importantly, loans — creates a structural deficit of growth opportunities for hundreds of millions of people, but it also makes Latin America and the Caribbean the perfect market for new, more innovative financial solutions.
However, up to this point the DeFi ecosystem has not catered to this region’s specific needs, and stablecoins might be one of the reasons why. While the market currently offers stablecoins for multiple fiat currencies — including the Euro (EUR), the Yuan (CNY), the Hong Kong Dollar (HKD) and the South Korean Won (KRW) — its biggest share (by both number of projects, market capitalization and volume) belongs to the United States Dollar (USD). Moreover, no fiat currencies from Africa, South Asia, Oceania or Latin America and the Caribbean are represented among these alternatives.
The reason behind this lack of diversity in the stablecoin market is not hard to explain: creating a fiat-pegged asset implies vast technical, financial and sometimes even regulatory challenges, whose cost might not be justifiable for currencies with smaller potential markets. But here is where the oracle-based approach to bringing fiat currencies on-chain comes into play. Since Chainlink oracles are capable of harnessing any type of off-chain data, they can provide the RCN protocol with price information about these currencies, which can then be used to denominate debt. Thus, borrowers can request loans in fiat currencies without requiring them to exist on-chain as stablecoins.
This is the case with the Argentine Peso (ARS), which is now available as a Borrowing Currency on the Credit Marketplace thanks to the BTC/ARS Price Feed created by Chainlink. But ARS is merely one of the tens of currencies that can be listed using this method, which once the initial integration is completed, becomes extremely cheap and fast.
This opens up a whole new world of possibilities, with RCN now being able to offer DeFi users from around the world the chance to request loans in their local currency, regardless of whether a related stablecoin exists or not, and without involving a long, expensive and complex process. In turn, this has the potential to speed up DeFi adoption in countries whose currency has not yet been adopted by the industry, a list that includes most of the world.
The Road Ahead
The listings roadmap for Fiat-denominated DeFi Loans will be defined on a community-driven basis, letting the Credit Marketplace current and potential users decide which currencies they would like to see integrated next. If you want to join the conversation, you can do it on RCN’s English and Spanish Telegram Groups!
Never miss one of RCN’s updates!
- Visit its Official Website & check the Credit Marketplace.
- Follow it on Twitter, Facebook & LinkedIn.
- Join its community on Telegram.
- Check its code on Github.
- Reach it at contact@rcn.finance & helpdesk@rcn.finance.
