Binance Signs Deal to Offer Extra Perks for BNB Token Holders

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Do you have BNB tokens and need a loan? If so, you will soon be able to use your BNB tokens as collateral for loans in your choice of fiat or crypto due to a new partnership between Binance and Libra Credit. The new partnership was recently announced on Libra Credits’ Medium account. As part of the partnership, blockchain startup incubator Binance Labs made an investment in Libra Credits.

Libra Credit Set to Launch Soon With Solution to Centralized P2P Platform Weaknesses

Binance Labs CEO Ella Zhang explained the reasoning behind choosing Libra Credit as a new partner: “The Libra Credit founding team has a wealth of experience and resources in financial services and payment solutions. They are committed to make long lasting impacts in the industry.”

Founded by Paypal veterans, Libra Credit is currently building its P2P loan platform after a successful ICO that raised $16 million. Its goal is to help improve liquidity of blockchain-based digital tokens by enabling the use of those tokens as collateral for loans. Libra Credit currently plans to launch its platform in the third quarter of 2018 and a mobile app in Q4 2018.

Decentralization a Leg Up on Competition

While there are other P2P crypto lending platforms, most of them are centralized and vulnerable to the weaknesses that come with it and one would be hard-pressed to find another one that would accept digital tokens as collateral. Some of them will not operate in the United States, for instance, out of concern about regulators clamping down on them. They may also suffer server outages and security weaknesses. Libra Credit aims to change this by setting a benchmark for decentralized loan platforms that can work with digital assets.

This may reassure lenders who have been burned on those other platforms that, if a borrower fails to pay up, the tokens can at least be sold on an exchange once the system recognizes a default on the loan. Yes, hodling is also an option, but the lenders may or may not be very interested in the long-term potential of any given token.

New Partnership Part of Binance’s Overall Strategy

Between this and the other projects on Binance’s roster, CEO Changpeng Zhao anticipates a profit of $1 billion by the end of 2018 even though Binance is not even a year old. Earlier this year, Binance launched the Binance Chain blockchain with the promise to migrate BNB Token from an ERC-20 token to Binance Chain. It also raised $30 million for a Stellar-based privacy coin called MobileCoin, announced plans to open an exchange in Jersey, and will be opening an office in South Korea.

If your knee-jerk reaction is that all this good news coming out of Binance is going to boost the price of BNB tokens, you’re probably right. The BNB token price did seem to make a nice jump during the weekend. However, now you have another reason to hold onto those BNB tokens you bought during Binance’s token sale because you’ll be able to use them as collateral if you ever need a loan once Libra Credit’s platform launches.

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