iP2PGlobal P2P Crypto Lending Platform will be adding a Gold-Backed Crypto Loan (“GbCL”) product to its existing Unsecured Crypto Loan and Secured Crypto Loan backed by other Crypto currencies products.

The GbCL has been structured following the Shariah finance concept of Rahnu or Islamic pawnbroking, which charges ‘Storage Fee’ rather than interests. The GbCL tenors will be 1 month, 2 months and 3 months. Collaterals accepted will be gold bars or jewellery with gold contents (where only the gold content will be valued as collateral).

The GbCL will be rolled out concurrently with the unsecured crypto loan products, based on the ‘Go to Markets Strategy’ Section 9.2, TWQ Whitepaper.

In order to provide GbCL, iP2PGlobal will be appointing local agents who are either jeweler shop/chain or licensed gold trader. Potential borrower will have to visit the agent for a valuation of the gold collateral before applying for a GbCL on the iP2PGlobal Platform. On successful loan auction, the potential borrower will then have to visit the agent and deposit the collateral items for safe keeping before the stable coin loan is disbursed to his/her wallet.

Valuation Receipt (“VR”) and Safe Keeping Receipt (“SKR”) on the blockchain.

IP2P Global is currently working together with a 3rd party technology provider who will provide an integrated certification and authentication system that all iP2P Global’s agents will be required to use. This system will allow digital VR and SKR to be generated as unique ERC20 tokens. The VR tokens will be issued to potential borrower’s wallet (to be used during loan application) & SKR tokens (issued after physical deposit of the collateral) will be sent to the particular GbCL smart contract, for the stable coins to be disbursed autonomously to the borrower’s wallet.

Transaction Flows for Gold-backed Crypto Loan

Why not use other existing gold backed tokens as collateral ?

There are many existing gold backed or gold pegged tokens out there. However the management of iP2P Global is taking the view that taking the additional steps of collateralising real gold will provide more security to the lenders, rather than taking these tokens as collateral. The management is also of a view that these tokens falls under the ‘Asset Tokens’ category as defined by FINMA which states that “Tokens which enable physical assets to be traded on the blockchain also fall into this category…”, therefore these tokens should have regulatory approval which unfortunately most do not.

iP2P Global will carefully monitor the market for future issuance of ‘gold’ backed tokens, if these tokens have the necessary approval, it will be included as one of the crypto currencies that can be used for our normal secured crypto loan product.

The Global Pawn Market

The global pawn market is valued at US$42,920 million in 2018 and is expected to reach US$46,560 million by the end of 2024, growing at a CAGR of 2.1% between 2019 and 2024, with the Asia-Pacific market, especially in China, India and South East Asia regions expected to increase their global market share in the following years.

Conclusion

With the addition of the Gold-backed Crypto Loan product, iP2P Global Ltd is taking another step to increase real world usage of crypto currency as a viable medium of exchange.

The Gold-backed Crypto Loan product, addendum to the whitepaper document is available on https://ip2pglobal.io