What is the equivalent of an IOU in the world of digital currency bank loans? 🤔

1 answers

• May 07, 2022 · 3 years ago
  In the world of digital currency bank loans, the equivalent of an IOU is a digital debt token. When someone borrows money from a digital currency bank, they receive a digital token that represents their debt. This token is recorded on the blockchain and can be easily transferred and traded. It serves as proof of the borrower's obligation to repay the loan and can be redeemed for the borrowed amount plus interest. Digital currency banks use smart contracts to automate the repayment process and ensure that the borrower's debt is settled according to the agreed terms. This eliminates the need for traditional IOUs and provides a more efficient and transparent way of handling lending and borrowing in the digital currency world.
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