Cred, a provider of cryptocurrency-based lines of credit, has recently announced that they will be adding XRP to their list of supported assets. This effectively allows XRP HODLers to put their coins up as collateral for USD loans, allowing them to utilize the coin without the need to sell or incur a loss in the form of capital gains tax.
The company, which is said to have over $300 million in credit facilities, offers interest rates as low as single-digits. This effectively allows XRP enthusiasts to put up their XRP as collateral, and gain a flexible line of credit which can be utilized for their day to day activities. This allows for the spending of their crypto-assets without having to sell them and incur capital gains tax when filing.
Mike Arrington, the Founder of Arrington XRP Capital, commented on the move by Cred, stating:
“As a Cred borrower, I appreciate how responsive Cred is to my needs. They continue to impress me with their ability to act as a trusted bridge between the traditional financial services ecosystem and the crypto community…their recognition of XRP as an asset class is important.”
Cred also announced recently that they would be powering the lending and earning products for the Universal Protocol Alliance and Uphold, which has also garnered positive support from the XRP Community in the past. Cred has also recently announced the launch of their LBA token, which effectively allows users to lower the interest rates of their loans, increase deposit yields and vote on specific projects on the Cred network.
The emergence of platforms like Cred allows cryptocurrency holders with large amounts of digital assets to effectively spend their money through a procedure now called the “Zuckerberg Tax”. By borrowing against the assets, users can effectively avoid paying tax until the realization of their profits, which can occur indefinitely until the user decides to sell his/her assets.
The co-founder of Cred, Dan Schatt:
“We’re thrilled to offer XRP holders the same low rates and convenient liquidity services as ETH and BTC holders. We’re looking forward to continuing to support our many partners who are integrating the Cred platform for the benefit of their users.”
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Author: Anirudh VK