Nebeus: A Crypto-Based Financial Services Exchange Where Users Can Lend, Borrow, and Earn Interest on Digital Assets

Nebeus Is A Crypto Based Financial Services Exchange
Adam West
By: Adam West
Posted: November 5, 2019
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In a Nutshell: Nebeus offers an array of financial services that allow users to realize the full value of their cryptocurrency. Users can convert digital assets to fiat and transfer funds through a bank card that works via the Mastercard network or even at their local post office. Nebeus also allows users to borrow against their Bitcoin and Ethereum assets, and its savings and investment plans offer higher interest rates than traditional banks. The upcoming Nebeus mobile app will make those services even more accessible, enhancing the value of cryptocurrency for those with limited access to financial products.

After an economic downturn began in 2018 and lasted into 2019, Jeremy Bradfield found himself holding plenty of Bitcoin but not much cash. While he needed funds to meet his day-to-day expenses, he didn’t want to sell off his crypto investments — traditionally, the only way to convert digital currencies to fiat funds.

Instead, Bradfield secured a loan using his Bitcoin as collateral through Nebeus, which enabled him to get the money he needed to make ends meet without liquidating his investments.

Many other cash-strapped, credit-poor, and underbanked individuals around the world find themselves in similar situations. Cryptocurrencies represent an enticing financial vehicle, but once people acquire them, they don’t want to sell them off to meet a one-time expense.

Nebeus allows those crypto-holders to get the cash they need without liquidating their long-term investments. Initially, Nebeus offered debit-style cards that allowed users to spend their Bitcoin and other cryptos. But the company has since shifted its focus to provide crypto-backed loans and investments.

Nebeus logo

“The whole business of Nebeus is around lending money, and the security is the crypto,” said Sergey Romanovskiy, CEO of Nebeus. “There are compelling reasons for people who have cryptocurrency not to sell but to leverage it for cash and then get it back.”

The first reason, according to Romanovskiy, is that when crypto values rise, people want to borrow against what they own and use the money to purchase more crypto. That can increase their overall profit if they ultimately decide to sell. The second reason is that people tend to buy when prices are rising, and then they refuse to sell at a lower exchange rate.

“They cannot accept the fact that they need to lose money,” Romanovskiy said. “They decided they have to keep it. That’s how the HODL movement was born.”

Through Nebeus, those who HODL (a deliberate misspelling of “hold” also said to mean “hold on for dear life”) can leverage their crypto assets for loans. They can also earn money through savings and investment accounts and easily convert their crypto into fiat currency.

Nebeus offers users valuable financial services in the crypto domain. Those may be particularly beneficial for people who lack access to traditional products due to financial missteps and lack of access.

Offering Two Fast, Efficient Ways to Convert Crypto to Cash

As of mid-October 2019, a single Bitcoin is worth nearly $8,000, and spending an entire Bitcoin represents what most would consider a significant expenditure. Many holders commonly spend only small fractions of a coin at a single time.

“People are spending a half, or maybe one Bitcoin, but I’ve never seen a 10 Bitcoin transaction. People who have that much money probably have ways to get better loan conditions,” Romanovskiy said. “Those people who deal with fractions of Bitcoins are typically unbanked, and often in countries where they don’t have ready access to banking systems. To serve them, Nebeus has recently started a new service.”

Photo of Nebeus CEO Sergey Romanovskiy

Sergey Romanovskiy, CEO of Nebeus, spoke about the platform’s impact in developing countries.

The service allows users to convert crypto into fiat currency and send it directly to a bank card via the Mastercard network. That provides a valuable alternative to traditional money transfers — which can take up to a week and charge hefty fees. But Nebeus charges only a small percentage of the amount transferred, and the transaction is fast.

“When you are using a Mastercard transfer, you get it in minutes,” Romanovskiy said. “We tried with different people in different countries, and it usually takes less than two minutes to get the money onto the card, and you can spend it right away. You can go to an ATM and take money out or go to a shop and buy groceries.”

The service is currently available in more than 100 countries worldwide. The user’s Bitcoin or Ethereum is automatically converted into the cardholder’s native currency, making it a convenient solution for those in need of quick funds.

And Nebeus users in select locations can even convert crypto to cash at their local post office.

“It’s very convenient for people because post offices are everywhere,” Romanovskiy said.

Users Can Access Cash Using Digital Assets as Collateral

People like Bradfield who want to borrow against their Bitcoin assets need only to pass a know your customer (KYC) test — no credit history or score is required. They use Bitcoin as collateral on their loans, which start at 250 euros with terms of three to 36 months and receive 72% of the collateral’s value.

The loan value is credited to the user’s account, and users can withdraw it in the form of Bitcoin, Ethereum, or euros. As long as borrowers pay back the loan, their collateral will be released and returned.

A reputable custodian holds collateral that exceeds 5,000 euros. Nebeus holds amounts below that threshold in cold-storage wallets on an air-gapped computer — i.e., one that is not networked or connected to the internet. That makes it impossible for hackers to remotely access and steal funds or private keys.

Screenshot of Nebeus loan banner

Nebeus users can leverage their digital currency as collateral on loans.

According to the Nebeus website, “The only times the computer is even powered-up is when we need to send crypto out.”

Cryptocurrency is also known for its volatility, and should the value of collateral fall below the cost of the loan, borrowers have several options. They can increase the collateral amount; deposit funds to cover the difference; repay the loan; or allow the system to sell the collateral to cover the debt.

The latter is also the case if the borrower is unable to make payments. After the system liquidates crypto assets to cover the debt, the remaining funds are available for the borrower to withdraw.

Savings and Investing Plans Provide Higher Interest Rates

People who invest in crypto often want to keep it for its potential. Because their prices fluctuate so often, crypto assets can gain value just as quickly as they may lose it. When crypto increases in value, the primary way to realize a return is to sell it — thereby losing the investment.

But Nebeus offers savings and investment programs that provide users additional ways to earn money from their crypto’s value. Nebeus borrows fiat against the value of the crypto deposited in savings and investment accounts, and it lends this money out to its network of borrowers.

Screenshot of interest rate comparison

Because of its efficient business model, Nebeus can offer higher interest rates for crypto accounts.

The returns from those loans provide savers and investors with interest rates substantially higher than what they can expect from traditional financial institutions.

The Nebeus crypto savings account is called the Rocket Program, and requires a minimum of 0.0006 Bitcoin or 0.3 Ethereum to open. The terms range from three to 36 months, and it offers an 8.46% interest rate. The Nebeus Investment Program requires a minimum of 0.55 Bitcoin or 32 Ethereum, and it offers a 13.5% interest rate.

“They can give their Bitcoin to Nebeus, and we secure it and receive a loan from the bank, which is guaranteed by the custodial service,” Romanovskiy said. “Nebeus doesn’t hold any money. Financial partners hold the money. The fiat is held by traditional institutions, and 90% of the crypto is held in Goldstar IG.”

Upcoming Mobile App Promises Greater Convenience for Crypto Holders

Nebeus found success narrowing its crypto products to investing and lending, and it now prepares to introduce new features that will make its services more accessible. Among those is a new mobile app, which will allow users to send funds more quickly and efficiently. As long as users have a mobile device and an internet connection, they will have access to the value of their crypto assets.

“The mobile app is essential in developing countries because usually, people are far from an office,” Romanovskiy said. “They live in a village, and they can’t go to a financial institution. So they can go online using their mobile device and make arrangements.”

Nebeus caters more to individuals who already hold crypto, understand how digital currencies work, and want to realize a return on their investment or gain access to loans. But crypto newcomers are welcome to use the platform, as well.

In either case, Nebeus allows them to leverage their digital assets and bypass the time and hassle of dealing with traditional financial institutions. Nebeus offers a fast, effective, and secure way to earn returns and gain access to financial services without liquidating their valuable crypto assets.

That especially helps underbanked and credit-poor individuals who turn to crypto for financial inclusion.