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Buenbit, an Argentina-based crypto exchange with operations in Mexico and Peru, launched a local currency loan product Monday that uses crypto as collateral.
Users of the platform will be able to use MakerDAO’s stablecoin, DAI, as collateral and withdraw up to one million nuARS, a stablecoin tied to the Argentine peso, the company said in a statement. At the current exchange rate, the maximum amount is equivalent to $3,333.
Federico Ogue, Buenbit’s CEO, told CoinDesk the product is the first of its kind in Latin America.
“It is a model that emerged abroad but with loans in U.S. dollars, but it does not work for Latin Americans. Who wants to borrow U.S. dollars in the region? Too much risk,” Ogue said.
Users can borrow for loans as long as they collateralize 80% of the requested amount, the company stated, adding that the DAI will be locked into the platform yielding returns.
The nuARS stablecoin, which operates on Binance’s blockchain, was developed by Num Finance, a firm that also plans to launch nuPEN and nuMXN, two stablecoins tied to the Peruvian and Mexican currencies, respectively.
In Peru, Buenbit plans to launch loans in partnership with Num Finance “shortly,” the company said.
In Argentina, users will be able to use nuARS to buy other cryptocurrencies on Buenbit, withdraw or spend them via the prepaid card offered by the exchange, the company added.
After the layoffs
In May, Buenbit laid off 45% of its staff – approximately 80 employees – due to the “global overhaul” in the tech industry, Ogue said via Twitter at the time. It added that the event was not linked to the crash of UST and LUNA.
The company also halted plans to expand into new countries including Chile and Colombia, Ogue told CoinDesk recently, although he did not rule out new openings in 2023. He did not provide further details.
“Exponential growth was more rewarded in the past; now, [it’s] sustainability and profits. That’s what we adjusted the plans around,” Ogue said.
The company is already in talks with investors to raise a new funding round in the third quarter of 2022, which will be minor compared to the $11 million Series A it raised in July 2021, Ogue said.
“This is a smaller round, so as not to commit to a scenario of uncertainty. We will wait to do a bigger round next year with a clearer picture,” Ogue added.
Buenbit plans to remain independent and is not looking to be acquired, Ogue said, although he acknowledged that banks and brokerages have approached the company about the possibility.
Ogue added that Buenbit plans to obtain an exchange license in Gibraltar in three months, following an 18-month process. Bitso, a Mexico-based crypto exchange, is one of several Latin American companies holding a similar license.
