Read full article at Bitcoinist.

Coinbase, one of the biggest crypto exchange platforms, has used Bitcoin as collateral for a cash loan with Goldman Sachs; terms as to the number of loans or interest rates are undisclosed as of this writing.

The loan was initiated by Goldman Sachs as the bank’s first-ever loan that is backed by crypto, specifically Bitcoin.

Suggested Reading | Shanghai Residents Turn To NFT To Document ‘Unerasable’ COVID Memorabilia

Crypto As Collateral

You can now apply for a loan with crypto as collateral. Yes, that is possible.

The loan given to Coinbase was reportedly the bank’s first bitcoin-backed loan. The amount and collateral are still unknown as of press time.

The collaboration between Coinbase and Goldman Sachs opened doors towards the potential of banks or fiat money and crypto to co-exist and thrive in the economy.

While there are Bitcoin-backed loans facilitated in other platforms like that of Genesis Trading Fund with Signature Bank and Silvergate, this is a breakthrough partnership because Goldman Sachs isn’t a crypto or blockchain company and is in fact a large traditional financial institution.

Suggested Reading | Singapore Restaurants Accepting Crypto Payments Amid Legislative Resistance

Genesis (crypto lending and trading) Managing Director, Matthew Ballensweig, shares that the standard terms with Bitcoin loans would be a loan-to-value ratio of 40% to 60%. Goldman Sachs is relatively new to the bitcoin space; specifically in loans hedged or collateralized with BTC.

Crypto total market cap at $1.71 trillion on the daily chart | Source: TradingView.com

However, the company has already experienced BTC processes as early as March with a non-deliverable BTC option or bilateral agreement that pays the borrowers in cash. The trade was initiated by Galaxy Digital Holdings, one of the notable crypto financial services established by a former partner of Goldman Sachs.

Coinbase-Goldman Sachs Alliance

Who would have thought there would come a time that you can apply and get a nod with a loan backed by crypto?

Interestingly, Goldman Sachs may have observed the rising demand for crypto-backed loans in different industries worldwide and wanted to test the waters before jumping into the next big wave. And so they did.

More so, Goldman Sachs has been sensational after it approved Coinbase with its first-ever BTC-backed loan in April. 

Now, the two companies have partnered together with the first-ever BTC-backed loan that is set to change the way banking loans are done right now and in the future.

In fact, Goldman Sachs offering Bitcoin-backed loans is a strategy to speed up and boost the global adoption of cryptocurrencies.

Featured image from Bullfrag, chart from TradingView.com

This article is strictly for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. CryptosOnline.com does not provide investment, tax, legal, business or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any loss or damage caused or alleged to be caused by, or in connection with, the use of or reliance on any content, goods, services or opinions mentioned in this article.

#Bitcoin #Cryptocurrency #Crypto

Categories:

Tags:

Comments are closed

Translate

Our Other Projects

EdgyBranding.com - Premium Domain Names.

Notezi.com - Social Network

ParisArtwork.org - Mid-century Paris NFTs, tokenized on the WAX blockchain.

NewYorkArtwork.org - Mid-century New York NFTs, tokenized on the Ethereum blockchain and offered on Rarible.

ClassicAutomobile.org - Classic Automobile News.

RSS
Facebook
Facebook
LinkedIn
LinkedIn