As blockchain boom approaches, VCBANK will launch blockchain digital financial services

The popularity of blockchain technology has become the biggest trend today. The application of blockchain technology has extended to multiple fields such as digital finance, Internet of Things, smart manufacturing, supply chain management, and digital asset trading. At present, major countries in the world are accelerating the development of blockchain technology. China regards blockchain as an important breakthrough for independent innovation of core technologies, clarifies the main direction, increases investment, and strives to overcome a number of key core technologies, accelerating the innovative development of blockchain technology and industry.

With various good news about blockchain, blockchain-related stocks and digital assets extended from the blockchain field have all soared. Among concept stocks, Xunlei soared 107.8% overnight to $4.82 per share, creating the largest single-day increase since its listing, and its stock price hit a seven-month high. In addition, The 9 City rose more than 20%, China Netcom rose more than 15%, and Cheetah Mobile rose more than 5%. Bitcoin once soared 40% in just 12 hours, breaking the $10,000 mark. The market value of Bitcoin remained around 1.2 trillion yuan, accounting for 63.2% of the total market value of global digital currencies, showing strong development momentum.

Blockchain technology company VCBANK TECH PTE. LTD. is working with a number of financial institutions to create an autonomous, efficient, convenient, secure and transparent innovative blockchain digital financial service platform. VCBANK will be launched for testing in November this year. Users can use VCBANK to borrow and lend digital currencies and invest in financial management. Users do not need to sell digital assets at a low price in a bear market to obtain funds. Idle digital assets can also be invested or managed regularly to obtain income.

We interviewed VCBANK's Chief Operating Officer NICLAS to conduct an in-depth interview on the development status, market and product model of VCBANK's blockchain digital financial services, and summarized the following questions and answers.

1. Why did VCBANK launch digital asset financial services?

We believe that blockchain technology is considered to be one of the scenarios that has a natural combination with financial products, and lending and financial management are strong demands that are easier to implement among many financial scenarios. At present, many models have been formed in the market, such as blockchain digital asset financial management platform, establishment of blockchain credit system, and creation of data protocol layer to connect various financial institutions. Our core team has been engaged in securities and financial business on Wall Street. Through contact with blockchain and digital assets, we found that with the popularization of blockchain applications, many digital assets have been derived. Its value depends on the application on the blockchain platform. The value of digital assets continues to increase, and a fair price recognized by the market has emerged. Exchange transactions of different digital assets have formed a huge digital asset service ecosystem. The future application scenarios of digital assets cover a wide range, and more and more people are exposed to and hold digital assets. It is a waste to put digital assets in digital wallets, especially when you just need funds for emergency, you have to sell the digital assets that have been stored for a long time, and even have to sell them when the price drops to a low point.

In addition, most traditional lending institutions in the world cannot accept encrypted digital assets as collateral. The mortgage loan processing procedures of traditional lending institutions are usually cumbersome, costly, and have some unfair and opaque terms. We hope to use our many years of financial industry experience and resources to provide digital asset holders with efficient, convenient, secure and high-quality financial services.

We have also cooperated with a number of financial institutions holding lending licenses to launch offline digital asset lending services in the United States, Singapore, South Korea, Hong Kong, China and other regions. After several months of trial operation, the market feedback has been very good and the market space is huge. We hope to introduce the offline model to the Internet to serve more customers.

2. What is the brand meaning and main business of VCBAN?

VCBANK is composed of the English abbreviation of VC + BANK bank, which means virtual currency bank and investment bank. VC is the abbreviation of Virtual currency and Venture Capital. We hope to create an efficient, convenient, safe and transparent digital asset financial service platform. The main business of VCBANK is to provide users with innovative blockchain digital financial service platform. At the same time, VCBANK is an open, transparent and TOKEN organization.

3. How do users obtain loans and financial management at VCBANK?

In fact, VCBANK only introduces traditional lending and financial management models into the field of digital assets. For example, traditional lending users can pledge real estate, jewelry, cars, stocks, etc. to obtain corresponding loans. We believe that as long as digital assets are accepted by the world, they should also have this value. We integrate the traditional lending model into VCABNK and simplify the relatively complex credit investigation and lending processes. As long as users have digital assets, they can obtain lending services on the platform without too many complicated processes and credit audits. At the same time, users can invest their idle digital assets for financial management and lend their idle digital assets through OTC to those in need. The platform acts as a guarantor to match transactions between the two parties. Investors can get returns immediately, borrowers can get funds immediately, the platform monitors the entire lending process, and borrowers pledge their digital assets to the platform to obtain corresponding USDT. In the near future, we will launch online digital asset financial services, and successively launch ultra-short loans (interest calculated on a daily basis), short-term loans (interest calculated on a monthly basis), large loans (interest calculated on an annual basis) and other services. The pledge rate of digital asset loans can be as high as 75%, and the annual interest rate can be as low as 8.3%. The maximum short-term and medium-term loans can be 1 million USDT, and the maximum long-term loans can be 22 million USDT.

4. How does VCBANK control digital asset price risks?

We have optimized the traditional risk control mechanism of securities pledge financing and integrated it into VCBANK, and launched a risk control mechanism that is more suitable for digital assets. Since digital assets have price fluctuations, in order to avoid risks, we will evaluate the digital assets and give a pledge rate corresponding to the market price. Now we can achieve a pledge rate of up to 75% based on the user's level on the platform. For example: if the user's digital assets are worth 10,000 USDT, then the maximum loan amount can be 7,500 USDT. On the other hand, there is also a price decline risk control mechanism. When the price of digital assets is lower than about 8,500 USDT, the system will automatically warn the user to cover the position. The user needs to replenish a certain amount of digital assets at this time. Covering the position can prevent the system from forced liquidation when the price of digital assets continues to fall. We enable different risk control mechanisms according to the user's lending cycle.

5. Why do users choose VCBANK financial services?

Let's take an example. On December 8, 2016, the price of digital asset BTC was $900. Mr. A and Mr. B both held 2,000 BTC and needed $1 million in funds urgently. They chose different ways. Mr. A sold part of his coins and sold 1,111 BTC at the price at that time to get $1 million. Mr. B pledged 1,587 BTC on VCBANK to borrow $1 million. On December 8, 2017, the price of the coin rose to $17,000. At this time, Mr. A's assets were: $1,000 ,000+889*$17,000=$16,113,000, Mr. B's assets are: 2000*$17,000-loan interest of about $180,000 (1 million US dollars loan for one year, annualized interest rate of 18%)=$33,820,000. Mr. B borrowed money through pledge, and his assets increased by $17,707,000 relative to Mr. A. From this case, we can see that when users believe that the value of their digital assets can increase by more than 20% each year and they need funds, they will choose to borrow instead of selling digital assets.

6. How does the VCBANK platform make profits and what is the future like?

We are currently mainly lending through cooperation with financial institutions that hold lending licenses, with licensed financial institutions providing lending funds. The platform's main profit comes from interest spreads and platform fees. VCBANK is an innovative digital financial service platform. In the future, its services will not only be limited to lending and financial services. In line with user demand, more digital financial services will be expanded in the future, including payment, shopping malls, etc.