[ad_1]
Those who look at the blockchain as a turning point, bringing the old business models to a new paradigm, point to the fact that information can be recorded but not altered. Therefore, logic, security and trust are intrinsic parts of this digitally driven process, with benefits accrued in the form of faster trade (no more paper) and lower rates for borrowers (ie risk premiums).
Could the pawn shop industry be ripe for processing? The business model is thousands of years old. A customer brings an article or articles into the shop, the article is evaluated, a loan is advanced – in other words, it is a secured loan – and the item is kept until the loan is paid.
The rates applied to borrowers are high, as the risk of default is high and interest rates can be three-digit percentages, annualized. Owners of a pawnshop? They also draw on credit markets to make loans. Among the most liquid and available items that make their way into the pawnshops, of course, there are jewels and other gold objects: think of the old grandmother's necklace or the forgotten class ring that makes noise in the drawer of the desk.
To this end, GoldMint, which operates as a FinTech company registered in Singapore and which is part of the Russian company KVP Group, has brought on the blockchain a network of pawn shops based in Moscow, in an attempt to optimize the entire process .
The group of Russian pawnbrokers, collectively known as MosGorLombard, with 16 offices, about 50,000 customers and a loan of $ 2 million, were taken to GoldMint's MINT blockchain operation. The blockchain connection comes on the heels of a previously existing relationship; GoldMint has provided services, as reported by blocktribune.com, to pawnshops, including gold purchasing and processing and accounting services.
The companies have declared this week that the blockchain is used to keep track of the gold jewels that are making their way into the pawn shops. The goal is to increase transparency and to support funding efforts, GoldMint said, as transactions related to loan disbursements and lending activities, including payments and defaults, are recorded through the blockchain. Transactions are verified by MNTP tokens. As reported, the mechanics are like this: Pawnshops pay a commission and part of the commissions (roughly equivalent to a nickel in the United States) is assigned to MNTP token holders to verify pawn shops transactions and to store data on the blockchain. The blockchain itself is based on what is known as a test of the pole algorithm.
GoldMint said the report marks a milestone, as this is the first time that companies in this vertical have been linked to the blockchain – and the connection extends to pawnshops, funds and investors.
CEO Dmitry Pluschevskiy stated at the time of the announcement in a statement that "we believe that a loan on a pawn shop should not be more expensive than a bank loan … this would simplify and greatly reduce the cost of attracting financing from large financial institutions and investors who are able to instantly access information such as turnover, the average loan, the amount of gold committed at the pawn shop now, which in turn will allow pawn shops to reduce the interest rate for the end user. "
Beyond the mechanics lies the process: Pluschevskiy told PYMNTS in an e-mail exchange on Thursday (10 January) that the pawnbroker evaluates the gold / jewel offered by the client and places the information in the database pawnshops and the data is recorded on the blockchain. The CEO stated that the data is rendered anonymous, as the data related to the loan are not actually transferred, such as the name, the interest rates or even the amount issued on the loan.
As Pluschevskiy has stated, the focus on gold makes sense as other typically pledged items, such as electronics or even cars can drastically fluctuate in price.
The potential is significant, GoldMint estimates, in a market that is universal and liquid, as the promised gold in pawns worldwide is equal to 1.2% of the total holdings globally and translates into around 2,000 tons. Based on a troy ounce price of $ 1,250, the amount reaches $ 90 billion. As GoldMint CEO at PYMNTS said, "the blockchain also helps fight the deception of expert managers and makes it easier to conduct a" gold "audit in those stores.
"Most pawn shops are cash, as pawnbrokers usually need money here and now, and bank transfers take time," the PYMNTS executive said. "Hence the problem: the pawn shop business is not transparent for banks or auditors and lenders can not grant loans to pawnshops at low interest rates." Blockchain solves this problem. it can quickly access all key indicators, see history and issue a loan at a rate that is more profitable for pawn shops, which means pawnshops will be able to lower interest rates for their clients . "
The typical Russian client of a pawn shop, he said, is a middle-class Russian citizen with a stable income who may not have enough available for consumption or working capital needs. Up to 90% of loans are granted with jewelry as collateral, with the remaining 10% divided between cards and antiques.
There are operational efficiencies that can be snatched from the pawnshop model in Russia, he said, as the constant need for collateral valuation means that additional levels of staff add several percentage points to loans that can offer higher interest rates. 150% per year.
Looking forward and abroad
Beyond Russia – where 11 million people go to the pawn shops, according to the National Financial Research Agency and the Association of Pawnbrokers – Pluschevskiy said there is a broader opportunity for gold transferred via blockchain worldwide. Gold-backed loans, he said, are used by over half a billion people worldwide.
"We are now negotiating with several large pawn networks, both in Russia and South America, Asia and Europe," he said. "This year we plan to connect several major networks around the world."
[ad_2]Source link
