Dutch multinational ING considers entering the DeFi lending industry

In a speech during the Singapore Fintech Festival, ING Chief Innovation Officer Annerie Vreugdenhil announced that the company is experimenting with the Dutch Financial Market Authority on decentralized finance or DeFi peer-to-peer lending agreements. Vreugdenhil talked about the following developments: Report Insights through the ledger:

We are studying a kind of peer-to-peer lending in a DeFi setting. But not on Bitcoin. We are interested in how you can use different types of collateral to create P2P lending or open up lending capabilities. So use a different way to do this instead of volatile Bitcoin.

ING is a Dutch financial services multinational company with more than $1 trillion In total assets under management.in a white paper Earlier this year, ING specifically mentioned Aave (Ethereum) Blockchain, as the latest innovation in the industry. Through smart contracts, Aave enables borrowers to deposit cryptocurrencies as collateral and obtain stable currency loans.

This mechanism can be used as a traditional asset loan, that is, while the investment continues to compound interest, the daily expenses are paid through debt. Based on ING’s concerns about using volatile assets as collateral, Aave also supports stable currency lending. At the time of writing this article, borrowers can earn approximately 3% annual interest by depositing their DAI in a floating interest rate pool, while lenders pay 4% annually, and vice versa.

Although ING praised DeFi’s borderless payment, 24/7 operation and transaction speed, Its white paper points out several shortcomingsIn particular, since loan agreements require collateral, they cannot create new funds for financing companies and entrepreneurs and other initiatives.

Nevertheless, ING has developed a strong interest in the blockchain industry in recent years. By the end of 2020, ING joins the Blockchain Education Alliance. The company also started Committed to digital asset custody 2021 and Discussed the development of some stable coins At a meeting in April this year.