Bitcoin Lending Could Transform Finance Amid Risks and Regulatory Challenges

Key Points

1. Crypto lending operates via CeFi platforms or DeFi protocols, allowing users to access cash without selling their crypto assets.

2. Lenders benefit from high annual percentage yields (APYs), often exceeding 10%, turning idle crypto into productive assets.

3. Borrowers gain instant liquidity by leveraging their crypto holdings, with users ranging from everyday investors to traders.

4. Risks include lack of government-backed insurance, platform hacks, market volatility, and regulatory gaps.

5. Experts recommend increased transparency, robust regulation, and improved security protocols to overcome challenges in the industry.