What is a synthetic currency loan?
A synthetic currency loan lets you invest in EUR while supporting borrowers who operate in other currencies, typically USD. It gives you access to a broader range of impactful investments without the need to manage multiple currencies on your dashboard.
Why use a synthetic structure?
Borrowers often operate in regions where USD or another stable currency is preferred. Lending in that currency helps reduce their exposure to local currency fluctuations. The synthetic structure allows you to invest in EUR, while the borrower receives and repays in their preferred currency.
Why does Trine use EUR for investments?
EUR is widely supported by European banks, helping to reduce fees and simplify the investment process. You invest and receive repayments in EUR; there is no need for separate wallets or currency conversions.
How does it work?
You invest in EUR.
Your investment is converted to the borrower’s currency when the loan is issued at the current exchange rate.
The borrower repays in their currency over time.
Repayments are converted back into EUR and returned to you.
How does currency exchange affect returns?
Your returns may vary depending on exchange rate movements:
If the EUR weakens compared to the borrower currency, your repayments in EUR will increase.
If the EUR strengthens compared to the borrower currency, your repayments will be lower.
Still have questions?
If you have any questions or concerns, we’re here to help. Reach out to us at hello@trine.com.