This Article is Originally Posted on MintDice.com
The emergence of peer-to-peer (P2P) cryptocurrency lending platforms in China has swiftly increased over the years. This is happening at a time when the nation is stuck in the middle of the latest liquidity crunch. The digital foreign currency markets are also seeing a long bearish period that has driven people to embrace P2P lending as a solution.
WHAT IS PEER-TO-PEER (P2P) CRYPTOCURRENCY LENDING?
Peer-to-Peer lending, or online lending, is a common method of debt financing that connects borrowers, who can be individuals or companies, with lenders. Zopa, the world’s first online lending platform, was founded in the United Kingdom in 2005 and since then, other countries have adopted the practice.
It has even been modified to embrace cryptocurrency lending, where users can borrow Bitcoin and other popular digital currencies and pay back with interest. However, it is risky for the lender since these platforms do not control the transactions that occur between its users. Typically, participants only use them as a means of reaching other people who either want to borrow or lend cryptocurrency.
BENEFITS OF P2P CRYPTOCURRENCY LENDING SYSTEMS
It is no surprise that the rate of cryptocurrency lending in China is increasing since it was one of the first countries to adopt digital currencies when they first emerged. The nation didn’t just embrace cryptocurrency lending, but mining as well. More than 70% of the total Bitcoin hashrate is concentrated within China.
WHY IS P2P CRYPTOCURRENCY LENDING SURGING IN CHINA?
Amidst regulatory issues due to exchange thefts, a fall in cryptocurrency liquidity and a bearish season that has dragged on since the beginning of 2018, China is upping its P2P lending rate. One major reason for the surge is the P2P rectification campaign that should have been concluded in June.
China has always been one step ahead when it comes to cryptocurrencies, a fact that is evident in their mining facilities and adoption rate.