Goldman Sachs will be providing its first bitcoin-backed lending facility, which is considered a major step for a US bank.
The spokeswoman for Goldman Sachs said that the bank lent out cash from its secure lending facility to the borrower, considering bitcoin as collateral.
Goldman Sachs announced on April 1 that it intends to provide Bitcoin-based financial solutions to its high-net-worth clientele.
Mary Rich, the bank’s global digital assets head, stated that the bank plans to offer investment possibilities in the digital asset area by the end of the quarter.
She stated that they are collaborating closely with other teams across the business to look at new methods to provide wealthy private clients with thoughtful and appropriate access to the ecosystem.
She also mentioned that it is something they want to offer shortly.
Goldman Sachs and other Wall Street banks ramp up crypto offerings
The whole idea of bitcoin-backed loans emerged in the banks’ thoughts in December 2021. Goldman Sachs had emphasized the vision and interest in using bitcoin as collateral for institutional loans.
Goldman planned to work with third-party agents to assist borrowers in selling securities to understand that they would be repurchased later. Clients may borrow cash more efficiently with these three-party repo agreements.
Wall Street banks, including Goldman Sachs, are skyrocketing their crypto offerings after a surge in price. Goldman traded its first-ever over-the-counter bitcoin options in the month of March.
They also have a dedicated digital assets team that provides guidance and signals entry as it gets into a new business line.
BlackRock Inc. joined a $400 million fundraising round in stablecoin startup Circle last month, while Jefferies Financial Group Inc. extends banking services for crypto customers. Cowen Inc., a boutique investment bank, launched a digital assets subsidiary in March.
Wealth management, trading, and investment banking are just a few of the crypto-related goods and services presently available on Wall Street.
According to Damien Vanderwilt, co-president of Galaxy Digital Holdings, lending to enterprises that supply virtual currency as security is the next stage.