Traditional banks are getting into crypto thanks to the rise of cryptocurrencies. Bloomberg reports that, the renowned investment bank, Goldman Sachs has just communicated a first loan backed in bitcoin (BTC). The Coinbase borrower insures cash loans through this cryptocurrency. This decision is seen as a sign of initiation by Wall Street into cryptocurrencies.
The global banking giant in partnership with Coinbase
Goldman Sachs has just taken the plunge by granting a line of credit backed by the cryptocurrency bitcoin. This is a first for a Wall Street financial institution.
According to Brett Tejpaul, Head of Coinbase Institutional: “ The collaboration between Coinbase and Goldman Sachs is a first step towards adopting cryptocurrencies as collateral connecting digital assets to fiat economies. »
The CEO of Tacen, Jae Yang, told GOBankingRates, it’s easy to see how these kinds of offers surprise people. Considering that only a few years ago, major financial institutions were reluctant to anything crypto-related. “Coinbase can be considered the platform for crypto exchanges, and they are a company with a fairly high level of expertise. Seen in this way, it is no wonder that Goldman is using Coinbase”, did he declare.
The Goldman Sachs Secured Lending Facility offers cryptocurrency holders the ability to borrow against fiat currencies, including the US dollar. This using their bitcoin (BTC) as collateral. However, the volatility of the price of the latter could jeopardize these bank loans. Borrowers could ask for more collateral in the face of a possible decline in bitcoin.
Goldman Sachs, cryptocurrencies and bitcoin (BTC)
Goldman Sachs reconstituted its bitcoin trading desk last March. The team of trading of cryptocurrencies was officially implemented in May. This was accompanied by the launch of the trading derivatives of the bitcoin cryptocurrency.
Goldman Sachs adds futures as well as alternatives to theether (ETH) to its platform oftrading of cryptocurrency. The bank conducted a first bitcoin options trade by mutual agreement with Galaxy Digital the preceding month.
According to Yang, crypto-collateral lending will soon become a major industry. Lenders use Bitcoin as collateral for mortgages, since Bitcoin is both pure digital collateral and digital gold. As a result, many more will follow Goldman Sachs’ path. Incidentally, the New York-based investment banking and financial services firm just set up a digital assets unit the previous month.
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Goldman Sachs launches bitcoin (BTC) lending through Coinbase
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