- XRP-backed loans are now available on the Nexo platform
- XRP can now be used as collateral for instant loans of up to $2 million
- Holders of XRP have the option to borrow against their asset when they need cash
In a tweet sent out last Wednesday, October 17, Nexo announced XRP-backed loans are already available on their platform. The move made them the first and (so far) only crypto lender to onboard XRP as a collateral.
XRP just gained more utility as an asset thanks to Nexo, the world’s first platform to provide instant crypto-backed loans of up to $2 million. This means users can now utilise the XRP tokens stored in their Nexo wallets to make use of instant loans. The rates stand at 8 percent per annum.
Nexo is backed by many prominent players in the cryptocurrency space including Michael Arrington. It is powered by Credissimo, a dominant European FinTech group that provides financial services to millions of people across the continent.
In the email received by users detailing the new offer, they stated:
“XRP holders now have the ability to instantly borrow against their asset rather than sell it when the need to access cash arises. This makes HODLing XRP even more straightforward, as it eases selling pressure and provides the most tax-efficient model .”
Cash on Demand
The service gives users the option to deposit their cryptocurrencies and other digital assets to their Nexo wallet and a loan will be allowed with no credit checks. In other words, users will have access to cash on demand while still owning their digital assets 100 percent.
Other assets that are accepted as collateral include Bitcoin [BTC], Binance Coin [BNB], Ethereum [ETH], and their native asset, Nexo Coin. The service also uses BitGo. BitGo is a custody provider that’s been approved by the United States Securities and Exchange Commission.
Nexo also provides a solution to a common hurdle many cryptocurrency enthusiasts face—tax issues. Currently, users are required to pay capital tax on their gains in the event that they cash out.
The platform addresses the issue by allowing users to use a method known as the “Zuckerberg Tax,” where tax liabilities are removed by converting selling into an overdraft while still giving users access to liquidity.