First Bitcoin-Backed Loans Issued to a Canadian Company
Canadian lender Ledn issues a Bitcoin-backed loan to a local crypto payment processing platform.
A Canadian lender has issued the country’s first cryptocurrency-backed loan to a local company. Using Bitcoin (BTC) as collateral, Ledn has issued a loan in Canadian dollars to Bylls, a Bitcoin payment processing platform. According to Francis Pouliout, CEO of Bylls, the loan allowed the company to leverage their crypto capital and solve important issues for the company.
“We are very excited to be the first company to use this service, which will finally allow us to maintain our policy of holding profits in Bitcoin. This is a game changer," Pouliot said in a report. “As a self-funded startup, it is important that we are able to reinvest our Bitcoin revenues in our business to sustain our growth. Traditional industries can normally leverage their cash flow from operations, but we were never able to make use of our accumulated Bitcoin capital without having to sell our precious coins, until now.”
The announcement, made during the 2018 Canada Fintech Forum, marks an important milestone for the Canadian Bitcoin ecosystem and establishes Ledn as the first and only Canadian company to issue a Canadian dollar loan taking Bitcoin as collateral.
The announcement was made during the 2018 Canada Fintech Forum, an annual gathering of developers, investors and experts from the financial and IT spheres hosted by Finance Montréal. Bitcoin-backed loans may turn out to be more financially advantageous as well, according to Ledn CSO Mauricio Di Bartolomeo.
“Ledn loans may also be a more tax advantageous way to access liquidity: whereas on the one hand, sellers of Bitcoin are subject to taxes on their profits, on the other hand, interest payments on Ledn loans may be tax deductible,” said Di Bartolomeo at the conference.
While using Bitcoin as collateral is nothing new, Ledn’s new service marks an important milestone in the development of the Canadian crypto industry.
While Ledn’s new service marks an important milestone for the Canadian crypto community, crypto-backed loans have already been offered by financial organizations around the world, with such lending platforms existing since at least 2014. In June, the Libra Credit platform added Binance Coin to its list of cryptocurrencies that can be used to back loans on the platform. In September, crypto-backed loans provider SALT announced it wouldl expand services to 15 new US States and seven countries.
Regardless, Ledn is arguably among the pioneers of the Canadian crypto industry.
“With all of the key pieces now in place to collateralize and process secure loans, we are proud of the progress that Ledn is making to provide value to the Canadian Bitcoin community,” said Adam Reeds, Co-Founder and Chief Executive Officer of Ledn.