Galoy recently launched Lana, a software designed to help community and challenger banks offer bitcoin as collateral for loans. This innovation aims to cater to both retail and commercial customers, with expectations that increased participation from banks will reduce the currently high borrowing rates of 12% to 15%. Overcoming past regulatory challenges, Galoy initially focused on creating a Bitcoin wallet before this significant step towards integrating bitcoin into traditional banking. Burtey anticipates a wave of banks entering the bitcoin loan market, which could lead to broader financial innovation.
"Some banks might want to use it to sell to retail, and some might want to use it to sell commercial customers or high-net-worth individuals," Burtey told Bitcoin Magazine.
"Today's interest rates are 12% to 15% if you want to get a loan using your bitcoin as collateral," said Burtey.
"The rates are high because there are so few financial institutions offering this type of product. We see an opportunity now that the regulations are allowing banks to do things with bitcoin," he added.
"We think a lot of banks will want to enter this market."
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