The largest cryptocurrency marketplace in the US is using Bitcoin (BTC) as collateral to get funding from a leading Wall Street bank.
According to a new Bloomberg report, Coinbase put up an undisclosed amount of BTC while getting a loan from Goldman Sachs, a milestone event toward taking cryptocurrency mainstream with traditional institutions.
Coinbase Institutional head Brett Tejpaul says of the deal with the financial services titan,
“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.”
While the Bloomberg report does not go into specific dollar or Bitcoin amounts within the Goldman Sachs loan, it does disclose that at the end of 2021, Coinbase’s overall crypto asset holdings exceeded $566 million. Bitcoin accounts for over $183 million worth of the total. Coinbase also had “cash and cash equivalents of $7.1 billion” at year’s end.
Last week it was first revealed that Goldman Sachs was planning its first-ever loan grant to a borrower that was fully backed by Bitcoin.
A crypto-backed loan includes the caveat that if the price of Bitcoin falls below a certain level, Goldman Sachs could force the borrower to add more collateral or liquidate the existing collateralized BTC.
A month ago, Goldman Sachs also announced that they planned to offer a “full-spectrum” of services related to digital assets to high-net-worth clients with at least $25 million to invest.
A recent study conducted by crypto exchange platform Bitstamp surveying over 5,500 institutional investors worldwide found that 88% believe that crypto assets will eventually overtake traditional money.
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Featured Image: Shutterstock/Luca9257/Konstantin Faraktinov
Source: https://dailyhodl.com/2022/05/05/coinbase-uses-goldman-sachs-first-bitcoin-btc-backed-loan-product-report/