Goldman Sachs has offered its first bitcoin-backed loan.
The move is a giant leap forward for the world of cryptocurrencies.
Goldman’s loan was backed by Bitcoin. The firm told CoinDesk that the “interesting piece for us was the structure and the 24-7-365 day risk management.”
The deal enables a bitcoin holder to receive U.S. dollars by putting up their BTC as collateral to the bank. However, if the bitcoin price drops, the user may have no choice but to increase their collateral. Failure to do so could result in the user being forced to liquidate.
Last month, the bank offered its first-ever over-the-counter crypto transaction in the form of a bitcoin non-deliverable option. They have expressed plans to ramp up their efforts.
Initially, legitimate financial institutions were cautious about throwing their hats into the cryptocurrency ring—but as time goes on, bitcoin is proving that it is here to stay—at least for the foreseeable future.
According to Bankrate.com, cryptocurrency surpassed $3 trillion in market capitalization in November. Approximately 16% of Americans have invested in, traded or used cryptocurrencies.
New York-based investment bank Cowen (COWN) announced the launch of its new digital asset division, Cowen Digital LLC, in February.
The division, based in Stamford, Connecticut, offers full-service trade execution and custody solutions on a platform that provides institutional clients with secure and compliant access to the digital asset ecosystem.
“Through Cowen Digital, our clients now have access to the crypto and digital asset markets with our institutional quality and fully integrated end-to-end execution and custody capabilities,” said Jeffrey M. Solomon, Cowen Chair and Chief Executive Officer. “Cowen is committed to outperforming for its clients by staying at the forefront of innovation.”
