Goldman Sachs is offering its first Bitcoin -backed loan, as a step forward for institutional cryptocurrency adoption at Wall St.
A spokeswoman from Goldman told Bloomberg if a multinational investment bank has lent cash collateral by Bitcoin (BTC) was owned by the borrower for the first time in the history of Goldman Sachs. He added that the deal is very attractive because of its structure and 24 -hour risk management.
The loan allows Bitcoin holders to borrow fiat currencies such as the US dollar, by giving BTC as collateral to the bank. The underlying volatility of Bitcoin can make the loan risky – if the price of bitcoin goes down too much, the borrower may have to add collateral, if there is no risk of liquidation.
Last month, Goldman, who now sports own internal digital assets teamexecution crypto over-the-counter (OTC) transactions first in cooperation with the trading unit of Michael NovogratzGalaxy Digital crypto investment company.
Goldman is not only in digital assets, with other Wall St banks also increasing their moves into the cryptocurrency space.
There’s a multi-trillion dollar asset management company BlackRock announced launches blockchain -focused ETFs. Earlier this month the firm also announced that they were participating in a Round $ 400M funding and partnership with Circlethe main operator of stablecoin USDC.
When overcollateralized crypto-backed loans have a staple in the world of decentralized finance (DeFi) for some time – crypto -collateralized loans have become an alternative way for institutions and governments looking to improve access to capital.
Yesterday, a blockchain real estate platform Propy announced a partnership with Abra to offer customers access to home loans using cryptocurrency ownership as collateral. On Wednesday, a new homeowners buy apartments in Austin, Texas, using a platform called USDC.homes. The deposit is crypto staked, and the mortgage is undercollateralized and based on the applicant’s credit score.
El Salvador is currently in the process securing finances for volcanic bonds; Bitcoin-created government bonds that will be used to amass $ 1 billion in funding for development of “Bitcoin City” and to increase the size of the country’s Bitcoin reserves.