Giant Financial Services ING is Working On Defi Loan Project

Posted on

The international banking giant is working on its own Defi project, but volatile cryptocurrencies won’t play a part in it.

ING, the Dutch multinational banking company, has started working with the Dutch financial authorities in leveraging decentralized finance.

Defi Bank Project

Annerie Vreugdenhil, ING’s Chief Innovation Officer, said this at the Singapore Fintech Festival yesterday. Speaking at the panel discussion, the CIO praised Singapore’s friendly regulatory environment.

As reported last week, the Monetary Authority of Singapore has no plans to ban Bitcoin. Furthermore, Singapore’s central bank leader has shown openness to stable coin innovation.

“Elsewhere, we are working with sandboxes that regulators have,” said Vreugdenhil. “We actually have in Amsterdam now an initiative about DeFi on P2P lending where we are starting to work with regulators.”

Apparently, the bank has plans to test the Defi loan project using the Financial Markets Authority (AFM) sandbox.

The AFM sandbox is the Dutch regulatory gateway for innovative financial products. This allows new businesses to innovate in the space without undue burden from the authorities.

An ING spokesman later stated that no concrete proposition had yet been developed for the regulator.

However, the bank has confirmed that Bitcoin and other ‘volatile’ cryptocurrencies will not be compatible with the project.

“What interests us is how you can create peer-to-peer loans or unlock lending capabilities with different types of collateral. So in a different way to do this than with volatile Bitcoin.”

White Paper Defi ING

Existing lending protocols such as Aave allow users to borrow cryptocurrencies, such as stable coins, with crypto as collateral.

However, these loans usually have to be excessively collateralized when dealing with Wrapped Bitcoin (WBTC) or Ethereum (ETH) to provide a cushion against volatile price swings.

ING mentioned Aave in a whitepaper published earlier this year, praising it for its efficiency and seamlessness.

However, the bank also criticized the protocol for not allowing the creation of new money to finance entrepreneurs and companies. Furthermore, he admits that tying real-world assets to Defi remains a challenge.

Leave a Reply

Your email address will not be published. Required fields are marked *