ING‘s chief innovation officer, Annerie Vreugdenhil, stated during a presentation at the Singapore Fintech Festival that the company is collaborating with the Netherlands Authority for the Financial Markets on a trial of its DeFi peer-to-peer lending protocol. According to Ledger Insights, Vreugdenhil said the following about the development:
“In a DeFi-style system, we’re looking into peer-to-peer lending.” On Bitcoins, however, this is not the case. What interests us is how you might be able to set up peer-to-peer lending or expand your lending capabilities by using various types of collateral. So, rather than using the volatile Bitcoin, we’ll try a few alternative approaches.”
ING is a global financial services company headquartered in the Netherlands that manages over $1 trillion in assets. ING explicitly cited lending technology Aave. Which built on the Ethereum (ETH) blockchain, in a white paper published earlier this year. Borrowers may use Aave’s smart contracts to deposit crypto as collateral and obtain a stablecoin loan.
The method may be utilised in the same way as a typical asset loan. Allowing one to borrow money to cover day-to-day expenditures as their investment grows. Aave also allows you to borrow and lend stablecoins, which aligns with ING’s reservations about utilising volatile assets as collateral. Borrowers may earn around 3% per year by putting their DAI into variable-rate pools at the time of publishing. While lenders pay 4% per year.
The company’s white paper pointed out a few flaws
While ING applauds DeFi for its borderless payments, round-the-clock operations, and transaction speed, its white paper also pointed out a few flaws. Borrowing and lending rules, for example, do not allow for the generation of fresh money for projects like funding enterprises and entrepreneurs since they need collateral.
Nonetheless, in recent years, ING has been more interested in the blockchain business. The Blockchain Education Alliance welcomed ING at the end of 2020. In 2021, the business started working on digital asset custody, and during a conference in April of this year, they discussed a number of stablecoin advances.