Peer-to-peer online marketplace Tred is accepting cryptocurrency as payment for vehicles to combat fraudulent transactions and penetrate the younger consumer market.

“Vehicles are a really good use case for crypto because we deal with so many different types of fraudulent payment types,” Grant Feek, Tred co-founder and chief executive, told Auto Finance News.

Accepting cryptocurrency provides a layer of protection for Tred that ensures payment. “With crypto, if we get the money, we know we have the money,” he said. That level of security in payments isn’t always possible through automated clearing house or credit card transactions because those payments could be reversed or disputed, he added.

Meanwhile, opening up the Tred platform to those who have “the crypto fever” extends the marketplace’s services to younger buyers, Feek said. “There’s a subset of people that will use our marketplace for that reason. They will say ‘I can use crypto on Tred, so I’m going to buy a car from them,’” he said.

Although the marketplace is accepting cryptocurrency from buyers, sellers will receive their payments in U.S. fiat currency, Feek said. “The buyer pays us and then we can choose what we want to do with [the digital currency]. We can convert it to the U.S. dollar or hold onto it.”

Tred is accepting about a dozen cryptocurrencies, including Bitcoin and Ethereum, he noted.

The financing process, which is incorporated into the P2P model, is not expected to be affected, Feek said. If a buyer “has [cryptocurrency] they probably don’t need a car loan in the first place,” he said. Tred’s financing partners include Ally Financial, Boeing Employee Credit Union and Westlake Financial, among others.

To be sure, Tred is not the first company in the automotive space to accept crypto as payment. Last year, Tesla Chief Executive Elon Musk announced via Twitter in February that electric vehicle manufacturer would begin accepting Bitcoin as payment before walking it back in May, citing environmental concerns over cryptocurrency mining. Carnomaly.io, an automotive blockchain and cryptocurrency company, also entered the auto finance market in June 2021 by allowing crypto holders to serve as funding sources for consumer auto loan underwriting.

Seattle-based Tred was founded in 2011. Its move comes on the heels of the company’s $25 million series B funding round in November 2021. The company has raised a total of $30.4 million in funding to date, according to Crunchbase. The peer-to-peer used-car marketplace facilitates complete vehicle transactions, including matching sellers with buyers or its dealer partners and connects buyers with financing when necessary.

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