Wall Street banks consider loans backed by bitcoins
by: Dynasty GI2021-12-06
The specialist crypto news site CoinDesk has reported that Goldman Sachs and other major US banks are looking at ways to accept Bitcoin as collateral for loans without actually dealing with the crypto currency. Although Goldman Sachs declined to comment, the site said it spoke to three people familiar with the plans.
So far, top-tier banks like Goldman Sachs have avoided cryptocurrency spot markets, tending to prefer other routes such as futures, and CoinDesk says that they are now looking at ways to adopt a similar approach to loans. The sources also told CoinDesk that the approach could lay the basis for a more integrated crypto prime brokerage offer in the future. According to CoinDesk, if it decides to go ahead, Goldman Sachs will have company, as other big banks are likely to follow the lead of crypto-friendly Silvergate and Signature banks, which announced Bitcoin-backed loan products earlier in the year. Although crypto regulation remains a complex issue in the US, the concept of cryptos being used as collateral for loans is partly justified following a statement by Brian Brooks, the previous administration’s head of the Office of the Comptroller of the Currency, who said Bitcoin was the equivalent of cash and that banks could be their safekeepers.