Rethinking Collateral for the Digital Age
The article explores redefining collateral in digital lending by leveraging social and virtual assets—like YouTube earnings, NFTs, and digital reputation—enabling gig workers and creators to access credit without physical assets.
In this article have explained, how it can work and a few models which I can think of, maybe an expert/practitioner can pick up and take it forward
Do we need to re-define, “Collateral” in DigitalLending? Is collateral only about something physical?
– Isn’t storing contact details from a borrower’s mobile phone collateral?
– Isn’t asking for social media information and taking virtual access to mobile phone collateral?
My question is, can someone’s YouTube, LinkedIn, Facebook content and connection quality be used as collateral for a loan?
Ok, let me explain.
Can I take a loan by pledging my YouTube earnings from my videos and content as collateral? And the lender can then own my earnings till the time I completely repay the loan.
We have seen such things happening through #Blockchain like increasing the use of Non-Fungible Tokens (NFTs). This concept is actually working for other industries.
Why insist only on physical collateral? Not everyone has physical collateral, many have social collateral which is worth more than the physical ones. The way physical assets get evaluated, we need trusted companies that can evaluate Social Collaterals too. It needs different thinking and new tools.
Next-generation will Thank us for doing…
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