It is smart contracts that solve the two key problems of peer-to-peer lending: lack of collateralization and legal backing. These two issues aren’t solved by clever legislation, but with cryptocurrencies. This significantly reduces the risks.
Ten years ago, no one would have thought of lending money to anonymous clients. But with the development of the crypto industry, a need for decentralized lending platforms operating in peer-to-peer payment systems has arisen. To avoid becoming dependent on third parties, and not to violate the privacy of financial transactions, it is necessary to conduct loans through smart contracts, collateralizing the deal with a native collateral token.