Goldman Sachs, a major financial firm, has offered its first Bitcoin (BTC)-backed loan as a major step forward for institutional cryptocurrency adoption on Wall Street. Here are the details…
Famous bank offers Bitcoin-backed loan
According to Bloomberg, a Goldman spokesperson said that for the first time in the history of multinational investment bank Goldman Sachs, the debtor-owned Bitcoin (BTC) He said he lent collateralized cash. He added that the deal is particularly interesting because of its structure and 24-hour risk management. Such a loan allows a Bitcoin holder to borrow fiat currency such as US dollars by putting their BTC as collateral with the bank.
Bitcoin’s underlying volatility can make these loans risky – if the price of Bitcoin drops too low, the borrower may need to increase their collateral, otherwise they risk liquidation. Last month, Goldman, which now has its own digital assets team, executed the first over-the-counter (OTC) crypto transaction in collaboration with the trading unit of Michael Novogratz’s crypto investment firm Galaxy Digital. At the time of writing, Bitcoin is changing hands at $39,545, below $40,000.
Wall Street companies are taking action for cryptocurrencies
Wall Street companies are accelerating the entry into the cryptocurrency space. As we reported on Kriptokoin.com, on Wednesday multi-trillion dollar asset management firm BlackRock announced the launch of a Blockchain-focused ETF. Earlier this month, the firm also announced that it is involved in a $400 million funding round and is partnering with Circle, the main operator of the USDC stablecoin.
While over-collateralized crypto-backed loans have been a staple in the world of decentralized finance (DeFi) for some time, cryptocurrency-backed loan is a popular choice for institutions and organizations seeking greater access to capital. becomes an alternative method for governments. For example, yesterday, blockchain real estate platform Propy announced a partnership with Abra to give its clients access to home loans using crypto assets as collateral.
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