Terra partners with Nexo into cryptocurrency-backed loan service
Terra, a cryptocurrency project led by TMON founder Shin Hyun-sung, signed a partnership deal with Nexo, the world’s first cryptocurrency-backed loan service company. What is Terra? Terra is a global blockchain-based fintech company that provides blockchain-based payment systems to online transaction platforms. Currently it is promoting a borderless payment system through its Terra Alliance. The alliance brings together TMON, delivery service Baedal Minjok, Singapore-based ecommerce platform Qoo10 and Carousell, a Singapore-based online shopping platform. It provides a stable token, a low volatility coin, for customers to easily use the platform. What is Nexo? It is the only blockchain-based company to provide a cryptocurrency-backed loan service. It is active in around 200 regions and connects with 45 fiat currencies. It takes cryptocurrency as collateral and provides a fiat currency loan based on that collateral. The cryptocurrency collateral is returned when the loan is paid back. Nexo’s service may infringe on U.S. regulations, however it is currently using BitGo, a U.S.-based cryptocurrency storage company approved by the U.S. Securities and Exchange Commission. Nexo also has a crypto bank account service that promises high interest rates. What is the purpose of the partnership? The two companies aim to provide a practical de-centralized financial service, provide a new financial product in the Asian market and expand the cryptocurrency loan and savings market. Through the partnership, Nexo is looking to introduce Terra and plans to provide a service in which customers don’t have to go through the complex process of being credit approved and immediately receive fiat or cryptocurrency loans. It also plans to provide customers with interest of up to 8 percent, much higher than traditional financial institutions, for customers saving their currency through its banking account. Parker’s note: The Nexo project has attracted the interest of investors since its initial coin offering last year. While it looks simple, no token-based savings product that promises high interest rates is available in the traditional financial markets. Meanwhile, Terra is working to expand its reach in the Asia-Pacific region. The partnership between the two companies will likely be beneficial for both.