CredibleFriends launches P2P bitcoin credit line mobile app, plans credit card

CredibleFriends launches P2P bitcoin credit line mobile app, plans credit card

- in All News, Crowdfunding, Featured News
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CredibleFirends, a recently launched mobile application for peer-to-peer lending in Bitcoin, is planning to issue a physical credit card that will be accepted as a Visa card, much like the Coinbase Shift and Bitpay cards.

Currently the mobile wallet and lending application is available only for Android devices, but will appear in the Apple iTunes store shortly. A web wallet is also in the works.

Only recently CredibleFriends raised $100 006 of its $250 000 fundraising goal on the cryptocurrency crowdfunding site BnkToTheFuture from 87 backers, surpassing the $100 000 needed by July 15  to ensure the funds pledged will be deposited.

“The mission at Credible Friends is to get digital currency into everyone’s pocket by making it insanely easy to extend credit to the people you know and trust already,” Zach Doty, CEO Credible Friends told Bravenewcoin.com.

While the loans are technically in Bitcoin, the accounts are in USD and calculates the value of the cryptocurrency on a daily basis, according to Bravenewcoin’s price index. According to Doty, thus the platform could also be used as a hedge against Bitcoin price swings. The platform locks in a 15% return, depending on defaults. A loan of $575, or 1 Bitcoin today, will be worth $661.2 in a year, regardless of the price of Bitcoin at that time. While this may work for or against the lender, it removes volatility.

In Doty’s words, the application is a “tap and lend” solution, which allows people lend money to their friends and earn interest. It is fairly simple to use and works instantly, unlike many other loan applications and companies who require a certain period to process the loan application.

Borrowers are charged 25% APR interest using the average daily balance method and the interest is charged monthly. The credit can be repaid in minimum monthly installments. Those who do not pay back on time, are charged additional fees. Sixty percent of the interest and fees go the lender, while the rest remains for CredibleFirends as profit.

P2P lending is a relatively new concept that emerged after the financial crisis of 2008, when P2P platforms like Zopa, Funding Circle and Lending Crowd started being used both by individuals and small businesses for unsecured loans. There are also Bitcoin lending platforms like BTCJam and Loanbase.

In spite P2P’s gaining popularity, however, a recent report on the UK alternative finance industry found that in 2015 in Great Britain the combined market of P2P lending, crowdfunding reached GBP 3.2 billion, but still represents a small portion (less than 1%) of the stock of bank lending.

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