Canadian blockchain startup, Ledn, opens up Latin American cryptocurrency holders to DAI loans using their digital assets as collateral. According to a published post on Coindesk, the firm will start off by offering Bitcoin (BTC) backed loans in the Ethereum based DAI stablecoin in order to promote the use of crypto across the region.
Get DAI loans in Latin America by Locking BTC as Collateral
Decentralized finance (De-Fi) systems are gradually picking up the pace, especially in developing countries with banking system troubles. Most Latin and South American economies are currently suffering as their fiat currencies continue facing massive devaluation in the past few years which is pushing citizens to consider DAI as an option for their daily transactions.
Over the weekend the central bank in Argentina lowered the dollar buying cap (again) from $10,000 USD to $200 USD which is slowly pushing the population towards crypto alternatives like DAI. However, BTC Hodlers who do not wish to sell their crypto to purchase daily utilities face a challenge in substituting USD to crypto hence the solution by Ledn.
According to Nadia Alvarez, MakerDAO’s head of business development in Latin America, Bitcoin hodlers will now be able to store their BTC and use crypto for their daily activities.
“We know BTC hodlers don’t want to sell their BTC, but they need liquidity, for their daily expenses. That is why we think this is relevant for Latin America.”
Users can lock their BTC in Ledn as collateral and receive DAI stablecoins as a loan which can then be used in transactions. Ledn “will buy Ethereum-backed DAI from over-the-counter traders and manage bitcoin custody for loan clients.”
Ledn co-founder Mauricio Di Bartolomeo, believes the DAI loans to Bitcoiners provide a gateway for the community to understand and appreciate the De-Fi world. He further looks forward to an increase in use of DAI as a payment channel in the region despite the volumes currently lagging behind schedule.
“We expect stable coin adoption to increase in the region because they solve important problems for users.”
Ledn became the first Canadian company offering Bitcoin backed loans in November last year and has since opened up its wings to partner with Cryptobuyer, a crypto exchange, to offer loans in South America.
A Use Case for DAI and De-Fi Products
According to the report, Pundi X, a cryptocurrency payment facilities firm, is looking to partner with MakerDAO, developer of DAI, to launch DAI payments to its 750 merchant stores across Latin America. The company will install point of sale (POS) devices across merchants in the region allowing customers to purchase goods and services using DAI stablecoins.
Not only will Pundi X support payment using cryptocurrencies but also promotes the transfer of funds across borders using its crypto debit card, X-Card.