Wall Street Bankers Research Bitcoin Loans

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2021-12-28 21:59:48

Banks like Goldman will not participate directly in the spot market of cryptocurrencies, but are more inclined to aggregate products such as futures. They will use tripartite repo arrangements (a type of borrowing money through the sale of securities with a specific repurchase agreement, through a third-party agent).

It can be said that this is an opportunity to lay the foundation for the expansion of cryptocurrency brokerage services in the future. At the same time, this is the bridge to bring Wall Street closer to the $2.7 trillion asset class.

“Goldman Sachs is working to get loan approval under collateral and compliance with Repo contract. And if there is a liquidation agent, they simply lend a secured loan without ever letting Bitcoin affect their balance sheet directly.”

Not only Goldman Sachs, several major crypto-friendly banks like Silvergate and Signature also announced Bitcoin-backed cash loans earlier this year. Additionally, a host of smaller lenders are also said to be looking at ways to put cryptocurrencies as collateral.

In fact, the idea of ​​banks using Bitcoin as collateral was once given the green light by regulators, when the Director of the Office of the Comptroller of the Currency (OCC) Brian Brooks said that Bitcoin is the equivalent of Bitcoin. with cash and banks can be their protectors.

However, the US regulatory stance on mortgage operations remains relatively complex. Depending on the bank and what exactly is being proposed, a regulatory board could come from a combination of the OCC, the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). ).

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