Bloomberg revealed last Thursday that Goldman Sachs just launched its first bitcoin-backed loan. This is facilitated by a secured loan mechanism backed by BTC for cash lending. At the same time, it was announced that the possibility of backing real estate with cryptocurrencies is now an alternative.
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Goldman Sachs and its bitcoin (BTC) backed 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. Which will have the following consequence: any holder of bitcoins can obtain fiat in exchange for setting up their crypto assets as collateral at the bank.
And if one day the price of bitcoin were to fall, the lender could ask him to increase his guarantee. Otherwise, the borrower risks liquidation.
Goldman Sachs is not the one who started the ball rolling
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 one not only treated 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 businesses that start accumulating revenue 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 having 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, 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 lending and borrowing service. Through Abra, borrowers will 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 an appropriate legal and technical framework for this type of exchange.
The bitcoin-backed loan as well as the linking of digital assets to the purchase of real estate is a real breakthrough for our contemporary society. Tomorrow, Cointribune will bring you more and more interesting news.
Source : Be In Crypto
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