The Celsius Network announced that it has lowered the minimum loan application to $1,000 and intends to introduce interest paid out of gold.
Celsius founder and CEO Alex Mashinsky said that they had lowered the minimum from $3,000 to $1,500, and now they decided to lower it to $1,000 again to “let users borrow smaller amounts without selling their crypto.” Borrowers still have to post the collateral which is twice the amount of the loan, though.
Discussing the difference between the business model of Celsius and the traditional banking world, Mashinsky remarked:
“We do the same thing as the banks, the main difference is that we give 80% back to the users while the banks keep 99%. Because we don’t have to pay dividends to the shareholders.”
Mashinsky said the portfolio of Celsius is dominated by larger borrowers in terms of volume, with several loans exceeding $10million. Smaller loans, however, make up the bulk of the loan portfolio as regards the sheer numbers.
Celsius to Introduce Two Gold-Backed Tokens
Celsius will introduce two gold-backed tokens to their ecosystem in May, Tether Gold (XAUT) and CoinShares’ (DGLD). Users depositing those tokens will be gaining interest in gold. Mashinsky further added:
“This is revolutionary, typically, with the gold you have negative yields, you have to pay the bank or another custodian for the privilege of ownership. With Celsius, not only you’ll benefit from the gold’s upside, but you’ll be earning interest in gold.”
Mashinsky also discussed how the U.S. government and the Federal Reserve handle the economic crisis that the coronavirus pandemic has induced. He said the current crop of politicians would not be willing to implement the painful solutions that are nevertheless needed:
“The economists and the politicians believe they have figured out how to smooth out the economic cycle, how to prevent recessions. They just print more money, this is their solution to every problem. All the growth that we have had since 2008, it’s all a bubble. All the growth is achieved by Americans borrowing money and spending it on the service economy. But the real growth doesn’t come from spending. Politicians, nowadays, don’t want to make tough decisions. It’s not how this country was built.”