Ripio Rolls Out Crypto-Powered Loans Across Latin America

Revealed exclusively to CoinDesk, Argentinian startup Ripio is making peer-to-peer microloans available today to all its 200,000 bitcoin wallet users in Argentina, Mexico, and Brazil.

The Buenos Aires-based company raised $37 million in an initial coin offering last year to build the Ripio Credit Network, which matches individual lenders and borrowers across the globe through ethereum smart contracts.

Previously known as Bitpagos, Ripio is one of the longest-running startups in the crypto space, with well-established merchant processing, exchange and wallet services.

While the borrowers receive their loans in fiat, the new network is powered by an ethereum-based token called RCN. Lenders send the funds in RCN, a cut of the tokens goes to third parties involved in the lending process - such as identity verifiers, credit scorers and co-signers of the loans - and Ripio converts the RCN to fiat before disbursing the money to the borrower.

Unlike most exchanges and mobile lending services, Ripio's offerings are available to unbanked crypto users.

Although the startup doesn't have data on how many unbanked users are on its platform, a survey of 1,000 Ripio users revealed 19 percent didn't have a credit card.

To make credit histories recorded in smart contracts widely useful, Ripio has proposed a standardized way to present claims about an identity on ethereum.

Since users are handing over cash, Ripio needs banks for storage.

Through its partnership with the e-commerce giant Mercado Libre, shoppers and sellers can transfer funds between their e-commerce accounts and Ripio wallets, offering new avenues for people to earn or spend crypto.

"So companies like Mercado Libre have to find ways to do business without credit cards. Ripio has been leading this, allowing people to do payments [indirectly] with bitcoin."