Babel Finance, a Hong Kong-based crypto lender, has announced plans to introduce a decentralized finance (DeFi) platform to facilitate creditors’ repayment. The platform will be accompanied by a crypto-backed stablecoin, which will be used to repay the $766 million loss incurred by creditors in 2022.
The move comes as Babel Finance seeks to recover from frozen withdrawals that have plagued the company since June 2022. The company’s sole director admitted to unusual liquidity pressure, which forced the lender to freeze withdrawals citing the contagion effect of the market meltdown emerging from the $60 billion Terra collapse.
To recover from the crisis, Babel Finance plans to file a moratorium extension that would hinder creditors from lodging claims for half a year. The lender’s report indicates that the DeFi platform and stablecoin will be used to repay creditors once the moratorium is lifted.
Babel Finance’s executive director believes that the DeFi platform will provide a more transparent and efficient way to repay creditors. The platform will allow creditors to access their funds without the need for intermediaries, reducing the risk of fraud and increasing transparency.
The introduction of the DeFi platform and stablecoin is a significant step for Babel Finance, which has been struggling to recover from the crisis. The company hopes that the platform will help restore confidence in the company and provide a path to recovery.
