A major network of pawn shops in Ukraine is launching a new lending service with loans secured by cryptocurrency. With over 300 branches, the pawnbroker plans to offer loans based on the type, amount, and price of crypto collaterals.
Also read: Indians Look to Buy Bitcoin Overseas as Regulations Tighten
Pawn Shops Offer Crypto-Secured Loans
Founded in November 1992, Skarbnytsya claims to be “the first and largest non-state [network of] pawnshops in Kiev and Ukraine.” According to its website, the company has “millions of customers,” 1,200 employees, and currently operates more than 300 pawn shops, with “the highest standards in the non-bank lending market.”
Skarbnytsya announced last week that, in collaboration with its partners, the company will start offering loans secured by cryptocurrency. Its head of marketing department, Ivan Ipatov, commented:
The implementation of this project is due to the rapid development of crypto and blockchain in the world. Our clients will be able to use the money and, at the same time, receive income from the growth of cryptocurrencies in the future.
The Terms of the Loans
Skarbnytsya emphasized that it will make the process of obtaining crypto-secured loans “as simple as possible…without undue formalities.”
For the approval process, the company says it will determine “the term and the amount of the loan” based on “the type and volume of the cryptocurrency” used as collateral. For each contract, its IT system will automatically factor in the amount of the cryptocurrency as well as its price. “This means that in the event of a price increase, an increase in the loan amount is possible,” the pawnbroker detailed. However, without fully disclosing the terms, Skarbnytsya wrote, “in case of a fall [in price], the borrower has sufficient time to decide on the future fate of their assets.”
Cryptocurrency owners can obtain loans in Ukrainian Hryvnia (UAH) for a period of up to 31 days, with the option to roll over the loans, the company elaborated, noting:
As soon as the debt on the loan is repaid, the entire amount of the cryptocurrency, which would have been transferred as collateral, is returned to the borrower in full.
Furthermore, Skarbnytsya stated that there will be no “additional commissions and hidden charges.”
What do you think of Skarbnytsya offering loans secured by cryptocurrency? Let us know in the comments section below.
Images courtesy of Shutterstock.
Need to calculate your bitcoin holdings? Check our tools section.