In a presentation made through the Singapore Fintech Pageant, Annerie Vreugdenhil, chief innovation officer of ING, introduced the agency is engaged on a trial of its decentralized finance, or DeFi, peer-to-peer lending protocol with the Netherlands Authority for the Monetary Markets. Vreugdenhil mentioned the next regarding the growth, as reported by Ledger Insights:
We’re wanting into peer-to-peer lending in a DeFi form of setup. However then not on Bitcoins. What’s attention-grabbing to us is how one can most likely create peer-to-peer lending or open up lending capabilities with totally different sorts of collateral. So with alternative ways of doing this quite than with risky Bitcoin.
ING is a Dutch monetary service multinational with over $1 trillion in complete managed belongings. In a white paper printed earlier this 12 months, ING particularly talked about lending protocol Aave, which is constructed on the Ethereum (ETH) blockchain, as one latest innovation within the trade. By means of good contracts, Aave permits debtors to deposit crypto as collateral and take out a stablecoin mortgage.
The mechanism can be utilized as a standard asset mortgage, i.e., take out debt to pay for on a regular basis bills whereas one’s funding continues to compound. According to ING’s issues about utilizing risky belongings as collateral, Aave additionally permits the borrowing and lending of stablecoins. On the time of writing, debtors can earn roughly 3% curiosity each year by depositing their DAI into variable-rate swimming pools whereas lenders pay 4% curiosity each year vice versa.
Whereas ING praises DeFi for its borderless funds, 24/7 operations, and velocity of transactions, its white paper identified a number of drawbacks. Particularly, since borrowing and lending protocols require collateral, they don’t allow the creation of latest cash for initiatives corresponding to financing firms and entrepreneurs.
However, ING has taken a eager curiosity within the blockchain trade lately. On the finish of 2020, ING joined the Blockchain Schooling Alliance.The agency additionally started engaged on digital asset custody in 2021, anddiscussed a variety of stablecoin developmentsduring a conferencein April of this 12 months.