Sun 01 May 2022 ▪ 2:30 pm ▪
min read – from
Bloomberg revealed last Thursday that Goldman Sachs has just launched its first bitcoin-backed loan. This is facilitated by a secured lending mechanism backed by BTC for cash lending. At the same time, it was announced that the possibility of supporting real estate with cryptocurrency is now an alternative.
Goldman Sachs and its bitcoin (BTC) loan.
This move by Goldman Sachs to launch its first bitcoin-backed loan heralds Wall Street’s rapprochement with the crypto space. To do this, it was necessary to put in place a mechanism favorable to the use of BTC as collateral for a cash loan. That will have the following consequence: every holder of bitcoins can get fiat in exchange for installing their crypto assets as collateral at the bank.
And if one day the price of bitcoin fell, the lender could ask to increase its guarantee. Otherwise, the loan risks liquidation.
Goldman Sachs is not the one that started the ball
Bloomberg, the press that originated this information, did not report specific details regarding this loan. But this information gap was quickly filled by a Goldman Sachs spokesperson. This did not only deal with this loan of ” interesting because of its structure and 24/7 risk management.
Currently, Bitcoin backed loans are on the rise among BTC mining companies. Those companies that begin to accumulate income in bitcoin are forced to pay their overhead and operating costs in US dollars (or other currencies).
By launching this new product, Goldman Sachs is following in the footsteps of other traditional financial conglomerates such as BlackRock (BLK). The latter recently participated in a $400 million funding round for Circle.
Cryptocurrencies support real estate
In view of the latest news, hand in hand, the two sectors bring new formulas for our society. In February, for example, Propy (United States) said it sold a house in Florida, which became the first NFT secured by real estate. This house, located in Tampa, was sold for 653,163 dollars, or 210 ETH at the time.
Propy again announced good news to its customers this week. Now, they are allowed to put their digital assets as collateral for real estate purchases. Provided that these operations are done through Abra Borrow, a cryptocurrency loan service. Through Abra, borrowers have direct access to fiat loans, which are necessary for the purchase of real estate.
The icing on this cake is the blockchain, a favorable technology for recording transactions (fiat, NFT or crypto). This technology therefore makes it possible to establish a suitable legal and technical framework for this type of exchange.
The loan supported by bitcoin and even the linking of digital assets to the purchase of real estate is a real advance for our contemporary society. Tomorrow, Cointribune will bring you more and more interesting news.
Source: Be In Crypto
Receive a summary of news in the world of cryptocurrency by subscribing to our new service ofdaily and weekly so you don’t miss any essential Cointribune!
The blockchain and crypto revolution is underway! And the day that the impacts will be felt on the most vulnerable economy of this world, against all hope, I will say that I had something to do.