Coinbase takes a bitcoin-backed loan
Crypto exchange Coinbase became the first Goldman Sachs client to get a bitcoin-backed loan.
According to Bloomberg, the precise loan amount, as well as the amount of collateral and interest rate, remain unknown. The parties involved in the deal have not disclosed all the details yet.
Still, based on information provided by Matthew Ballensweig, managing director and co-head of trading and lending at crypto prime brokerage Genesis, the average bitcoin collateral on the market typically ranges from 40% to 60%. “Tenors can vary as well as other prepayment terms, but it’s a simple structure to bring institutional lenders into the market,” Ballensweig said.
The management of the crypto exchange approved such a deal. “Coinbase’s work with Goldman is a first step in the recognition of crypto as collateral which deepens the bridge between the fiat and crypto economies,” Brett Tejpaul, head of Coinbase Institutional.
It is worth noting that the Goldman Sachs loan is not a groundbreaking solution. The broker has previously structured similar loans with cryptocurrency-friendly banks like Silvergate Bank and Signature Bank.
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