CarNow Partners with Cion Digital — How Buying a Vehicle With Cryptos Like Bitcoin Can ‘Simplify the Process’
As cryptos are becoming more mainstream, as reflected most recently by President Joe Biden’s executive order on digital assets signed Mar. 9, you can now buy a car with cryptos, whether partly or fully, thanks to a partnership between digital retailing company CarNow and Cion Digital.
Cion Digital’s payments and lending platform will provide companies with access to all the connectivity, infrastructure and support needed to deploy blockchain-based real-time payment and lending solutions, and to incorporate digital assets into existing traditional and legacy payment and financing systems, Cion said.
Fred Brothers, President & Co-founder of Cion Digital, told GOBankingRates that at rollout — in the second quarter — Bitcoin, Ethereum, Cardano, Tether, Litecoin, USDC, Polkadot and Dash will be among the cryptos accepted.
“The Cion Digital platform can support all cryptocurrencies although we expect the Top 20 coins as measured by CoinMarketCap to be the bulk of the transactions,” Brothers said.
He explained that car buyers can choose to place a deposit on a vehicle with crypto, make a down payment or pay for the vehicle in full. There is also an option to combine both crypto and fiat currencies in the same transaction. Transactions are confirmed on the blockchain and transferred in compliance with AML and KYC regulations directly to the custodian in either crypto or fiat (as requested by the dealer) in just a few seconds.
In addition, car buyers can also use cryptocurrency as collateral to qualify for a low-interest loan with one of several lenders in Cion Digital’s lending marketplace — almost always at significantly better rates than traditional financing.
Brothers said that there are many advantages to buying a car with crypto.
“Crypto transactions simplify the process because there is no need to involve banks or even run a credit check. This not only protects users and user data from being exposed in hacks and other breaches that we’ve seen in recent years but also these transactions become significantly faster,” he said. “While a normal bank payment or traditional loan can take a few days, transactions with cryptocurrency are settled within minutes — sometimes within seconds.”
Cion said that buyers can also use cryptos as collateral to qualify for a low-interest loan with one of several lenders in Cion Digital’s lending marketplace — almost always at significantly better rates than traditional financing.
According to Brothers, with no credit score or need to involve banks, cryptocurrency loans involve fewer players and fewer processes while offering a new way to lend that is outside of traditional financial services infrastructure.
“With so much development and advancement of blockchain technology mixed with mainstream adoption, cryptocurrencies are in high-demand. Therefore, when cryptocurrency lenders provide loans — in this case paid out in fiat or fiat equivalents — lenders gain access to something a lot more useful: new cryptocurrency as collateral,” he said. “With this collateral provided from the car buyer, lenders can go through a process called ‘rehypothecation’ where they lend out the collateral and can earn significantly higher yields. In a lot of ways, this process mimics what traditional banks do today with consumers saving accounts.”
In terms of audiences the companies are targeting, Brothers said that while many millennials hold cryptocurrency today, they expect to see continued exponential growth among all demographics.
“We believe in Web3. One important aspect of Web3 is blockchain technology. We believe blockchain technology will be a critical component for every product and service in the future. As a component of blockchain technology, cryptocurrency will also be an important piece for future products and services,” he said.
Asked whether the partnership was timed with Biden’s executive order, Brothers said that “while we had no prior knowledge and foresight of a Biden Executive Order, we do embrace regulation and we welcome any clarity regulators can provide in the upcoming months.”
“We fundamentally believe in everything Web3 has to offer. Of course, with any new space, especially something that impacts financial services, we always anticipated regulation would come,” he said.