The Celsius Network is lowering its minimum loan request to $1,000 and will introduce interest paid out in gold.

Celsius founder and CEO Alex Mashinsky told Cointelegraph that they had previously lowered the minimum to $1,500 from $3,000, and now they decided to lower it again to $1,000 to “let users borrow smaller amounts without having to sell their crypto”. However, borrowers still need to post the collateral that is twice the loan amount.

Discussing the difference between Celsius’ business model and the traditional banking world, Mashinsky observed:

“We do the same thing as the banks, the main difference is that we give 80% back to the users while the banks keep 99%. Because we don’t have to pay dividends to the shareholders.”

Mashinsky stated that in terms of volume, Celsius’ portfolio is dominated by larger borrowers, with several loans exceeding $10 million. However, in terms of the sheer numbers, smaller loans make up the bulk of the loan portfolio.

Gold on gold interest

In May, Celsius will introduce two tokens backed with gold to its ecosystem, Tether Gold (XAUT) and CoinShares’ (DGLD). Users that deposit those tokens will earn interest in gold. Mashinsky told Cointelegraph:

“This is revolutionary, typically, with the gold you have negative yields, you have to pay the bank or another custodian for the privilege of ownership. With Celsius, not only you’ll benefit from the gold’s upside, but you’ll be earning interest in gold.”

US government is afraid of "tough solutions"

Mashinsky also discussed the way the United States government and Federal Reserve are handling the economic crisis induced by the coronavirus pandemic. He stated that the current crop of politicians is unwilling to implement the painful solutions that are nonetheless necessary:

“The economists and the politicians believe they have figured out how to smooth out the economic cycle, how to prevent recessions. They just print more money, this is their solution to every problem. All the growth that we have had since 2008, it’s all a bubble. All the growth is achieved by Americans borrowing money and spending it on the service economy. But the real growth doesn’t come from spending. Politicians, nowadays, don’t want to make tough decisions. It’s not how this country was built.”