I would be supportive of loaning if the purpose was to create businesses/DACs/DAOs that added value to the Nu Network and helped it grow. A prime example of this is B&C Exchange.
I am however not supportive of general loaning, for example car loans, mortgages and business loans that have nothing to do with Nu. These types of loans should NOT be made directly through Nu, rather they need to be handled indirectly through 3rd parties. In the same way that the Federal Reserve provides the currency in the form of the USD for normal banks around the country, who then loan it out to customers, the Nu Network would provide the currency in the form of NuBits to 3rd party banks/loaning institutions around the world.
Nu already carries a great deal of risk in keeping its peg. Adding even further risk by directly managing loans through Nu unnecessarily puts the peg in danger in the case that customers default on their loans. Nu should be in the business of providing the currency to 3rd party intermediaries who take on all the default risk.
Loaning requires some form of collateral and checking of identification and credit in order to successfully loan to the right people who will actually pay back their loan. It’s difficult to carry this process out in a decentralized way where customers are anonymous. 3rd parties can operate NuBit loaning businesses in their local areas, check credit, do background checks and require whatever collateral they need to feel confident the loan will be paid back. If these 3rd parties are successful in their loaning operations, then Nu will profit through increased demand and printing of more NuBits. In the far future, these 3rd parties could possibly become as big as the largest banks in the US, such as Bank of America, constantly purchasing NuBits from NuShareholders that could then be loaned out to customers.
This is just my opinion of course. I think loaning directly through Nu is both difficult and dangerous to the peg without a way to accept some form of collateral and verify identity and credit history. These things are vital to a successful loaning operation. Without them, it would be difficult to weed out the people who would fail to pay back their loans. 3rd parties will be able to conduct business in person with potential customers, verify ID, credit and have the law on their side when people fail to pay their loan back and it comes time to collect the collateral that has been guaranteed with a signed contract. A decentralized network can’t manage all these things. Because of this, I believe 3rd party loaning institutions will be very important to Nu in the future.
Maybe we should be the first ones to fund one of these NuBit loaning businesses, to help get the ball rolling. If it’s successful, it could encourage more people to start their own loan business.
