Digital Assets: Goldman Sachs Makes Its First Loan Against Collateral of Bitcoin

April 29, 2022 | Digital Assets, Latest News, News
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The Goldman Sachs transaction marks the fast-developing “crypto-ization” of Wall Street.

Goldman Sachs (NYSE: GS) has extended its first-ever loan backed by a customer’s bitcoin, the leading cryptocurrency. According to a spokeswoman of the Wall Street giant, the secured lending facility lent cash collateralized by bitcoin owned by the borrower. (BloombergQuint)

The spokeswoman further said in an email to Bloomberg: “We recently extended a secured lending facility where we lent fiat collateralized on BTC; BTC being owned by the borrower. The interesting piece for us was the structure and the 24-7-365 day risk management.”

Unlike most other financial markets, cryptocurrencies trade round the clock.

However, no details were available such as deal size and the identity of the customer.

The transaction indicates Goldman Sachs is dipping its toes into waters usually the preserve of specialized cryptocurrency players.

Here are a few players in the DeFi space:

  • Sienna Network, the ‘privacy decentralized’ startup, has now launched Siennalend, its private crypto lending platform. The company claims that crypto users can use the platform to earn interest on their crypto and also borrow crypto from the platform – all privately.
  • Goldfinch, a DeFi platform that specializes in making no-collateral loans, focuses on emerging markets as well as lower-income households in advanced economies frozen out of the banking system. According to Blake West, the founder, Goldfinch is a platform that “brings crypto loans to the real world” without collateral. On April 26, the protocol’s loan book hit $100 million.
  • Milo Credit, offers U.S. home loans via crypto mortgages “for anyone, anywhere.” It has processed loans of $300 million for borrowers in 63 countries. Milo’s website assures – “No credit history or SSN required/Made for consumers with unique wealth/Built with powerful technology/10-minute online application/Close in under 30 days.”
  • USDC.homes, a new decentralized finance project, is inviting holders of digital assets in Texas to buy homes with their crypto wealth. The so-called “crypto mortgage” allows users to leverage their crypto holdings in the home buying process up to 80% of the purchase price, and even earn interest on their down payment. One can borrow up to $5 million on a 5-year ARM, 30-year mortgage at rates as low as 5.5%.

Related Story: USDC.homes Offers DeFi (Crypto) Home Mortgages

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