Startup Meld Partners with Banks to Lend Dollars Against Crypto
- Source: americanbanker.com
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In the February 3rd American Banker article by Penny Crossman, the co-founder and CEO of Meld, Ken Olling, described the need for investors in crypto to have ready access to liquid assets.
“It got to the point where when I went out with my friends, all of them had seven-figure portfolios, but I was the one who was buying dinner,” said Olling, who is co-founder and CEO of Meld, a crypto lending startup that officially launches Thursday. “I had the cash, but they were seeing monthly double-digit increases in their portfolios. “Everybody who has cryptocurrency knows this feeling: they don’t want to get out of their long position, but they need to live their life,” Olling said.
Meld is creating a lending protocol developed to work with banks to provide loans in fiat dollars while using client crypto as collateral. Meld is planning to start outside of the U.S. and hopes to enter the domestic lending market once regulations have been established by the federal government, although a timeline is not expected any time soon. Currently, over 60% of crypto users are outside the U.S. Due to the volatile nature of crypto, the amount of fiat currency borrowed against a user’s crypto portfolio is estimated to be about half of the value of the crypto amount.
There are other companies already doing similar business, but Meld is targeting a client base that is focused more on individuals that may be less technically savvy than other early crypto adopters. As use outside of the U.S. becomes more widespread, Meld hopes to be in a good position to enter the market here once regulations are finalized.