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Block Earner launches crypto-backed loans amid rising costs
Tue, 5th Dec 2023

Australian fintech company, Block Earner, has officially launched a crypto-backed loan service aimed at helping a significant portion of Australians navigate rising living costs without having to sell their crypto assets. Leveraging blockchain technology, Block Earner's market-first offering is already gathering considerable interest, with $9m worth of loans, backed by over $33m in cryptocurrencies, waiting in the application queue.

The innovative product enables cryptocurrency owners to utilise their assets as collateral without having to sell, adhering to a 33% loan-to-value ratio (LVR). Competitive rates offered include a 4.95% per annum charge on Ethereum-backed loans and 6.95% for Bitcoin-backed loans, with both types attracting a 1% origination fee. Significantly, Block Earner's product is the first local solution offering these features with Australian Credit License Authorisation and an AUD-denominated offering.

Block Earner's loans are ideally suited for the current financial climate, where inflation is peaking to its highest in 30 years and interest rates are the highest they have been in over a decade. With Australian savings levels reaching precarious lows - millennials and Generation Z's average combined savings stand at a mere $20,000 - the need for liquidity to cover increasing living expenses has become painfully evident. Coupled with the fact that the value of digital assets has been falling, homeowners have suffered cuts to meet mortgage repayments. However, Block Earner's crypto-backed loans cater to these needs without forcing crypto owners to sell their assets.

"Block Earner is the first blockchain company in Australia to provide groundbreaking crypto-backed personal loans, offered with an Australian credit license authorisation, to crypto investors," affirms Charlie Karaboga, co-founder and CEO of Block Earner. He highlights the urgency of such a product in the current Australian economic climate, stating, "4 million crypto holders are going through a cost-of-living squeeze and are dipping into their savings or selling off their investments to free up cash. Now, however, we're providing a way to free up cash without needing to sell their investments with a unique borrowing option that Australia has never seen before."

Block Earner's research suggests that 61% or approximately 2.8 million Australian crypto owners are contemplating using their crypto assets as security for securing loans in the upcoming year to buffer against costly living expenses. To accommodate this, Block Earner has set loan-to-value ratio (LVR) for its innovative product at 33%, providing its customers a safety net from any large market fluctuations.

As a proactive measure against future market volatility and potential asset value loss, Block Earner has devised a customer-facing communication engine that notifies users during events of high volatility. Additionally, an automatic repayment threshold at 70% LVR means that the value of a customer's crypto would have to halve to trigger automated loan repayment.

"As Australia's first crypto-backed loans provider, Block Earner operates under an Australian Credit Licence Authorisation and is currently a member of the Australian Financial Complaints Authority (AFCA)," concluded Karaboga.