Lock BTC, Get DAI: Lending Firm Bridges Bitcoin-DeFi Divide in Latin America

Published on by Coindesk | Published on

Canadian startup Ledn, which offers bitcoin-backed fiat loans, now also offers dollar-pegged DAI loans, connecting bitcoin users with ethereum's decentralized finance ecosystem.

Out of "Thousands" of users, more than half of Ledn's users are in Latin America, Di Bartolomeo said, where ethereum-backed DAI is increasingly seen as an alternative to strictly regulated dollar transfers.

Plus, later this month Maker token holders, who govern the stablecoin ecosystem, will vote on whether to include bitcoin among the upcoming multi-collateral version of DAI. In the meantime, Ledn will buy ethereum-backed DAI from over-the-counter traders and manage bitcoin custody for loan clients.

Di Bartolomeo said clients across Latin American have reported banking issues comparable to Argentina, although unique for each context, which is why they are turning to DAI. He added Colombians make up 16 percent of Ledn's user base, the largest demographic in Latin America, followed by Venezuelans at 12 percent.

"Several users have expressed that they would like to use stablecoins like DAI to purchase additional digital assets and others to access more financial services," he said.

Ledn users will soon be able to lock up their bitcoin and spend DAI at 750 merchants across Colombia, Venezuela, Argentina and Brazil, according to MakerDAO's Alvarez.

Separate from the loan startup, MakerDAO is partnering with product-provider Pundi X, and planning to install point-of-sale devices across Latin America so that DAI users can spend crypto directly on goods and services.

"The [Ledn] DAI loan gives bitcoiners the opportunity to enter into the DeFi world, and all the projects inside the ecosystem," Alvarez said.

Globally, MakerDAO records currently show more than 60,000 DAI wallet addresses in October 2019.

"While we don't yet explicitly hear from our users that they are spending DAI for their day-to-day expenses like they do with dollars," Di Bartolomeo said, "We expect stablecoin adoption to increase in the region because they solve important problems for users."

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