Australian crypto holders could soon be using the Coinstash exchange platform to spend, earn interest on savings and even take out a loan.
The Coinstash founders have revealed their ambitious plans following a successful $2.8 million crowdfunding raise.
They want crypto to be treated in a similar way as fiat and practical currencies, rather than being viewed as just a speculative asset. This would fulfil the true purpose of cryptocurrency, co-founder Mena Theodorou told Business Insider Australia.
Transforming the Australian crypto space
The Brisbane-based startup hopes to be the first in Australia to allow users to earn interest on their crypto coins, borrow Australian dollars using these coins, and spend anywhere in the world.
Joint Coinstash founders Theodorou and Ting Wang say users will be able to purchase a vast range of products—everything from overseas holidays to electronic items—via a crypto credit card which comes without the usual high fees.
Together, these new initiatives would give people access to more flexible and cost-effective ways to use their crypto holdings, far beyond the usual buying and selling.
How will the proposed facilities work?
Once Coinstash receives regulatory approval, the platform can implement its plans. Users will be able to:
- Earn interest on cryptocurrency, just as they earn interest on bank savings.
- Borrow against their cryptocurrency, using a physical asset like a house or car as collateral.
- Spend using a specialist credit card, with spending limit and minimum monthly repayment. The dedicated crypto credit card would enable holders to make purchases directly, rather than having to sell their crypto coins for Australian dollars first.
Tesla drives a super-charged market
As Theodorou says, Tesla has helped prepare the ground by accepting Bitcoin as payment for its electric vehicles.
This makes Elon Musk’s trail-blazing company the first large organisation to hold Bitcoin as a store of wealth, rather than immediately converting it into fiat currency following the purchase.
Advances have also been driven by a surging Bitcoin price and greater cryptocurrency take-up by companies around the world.
Will Coinstash get regulatory approval?
Yet the Coinstash rollout will face its share of challenges, including around using an asset as collateral for a loan. According to Business Insider Australia, the volatility of crypto means the value of the asset could undergo big shifts while the loan remains outstanding.
The founders are banking on a combination of borrowing limits and rising crypto prices over time to counter this threat. If problems happen, they anticipate customers choosing to pay back part of the loan or increase their collateral.
Now it’s down to whether the regulators will approve the plan, giving Coinstash the green light to move ahead.