Goldman Sachs, Other Wall Street Banks Exploring Bitcoin-Backed Loans

Goldman Sachs is among a handful of tier-one U.S. banks figuring out how to use bitcoin as collateral for cash loans to institutions, CoinDesk reported Thursday, citing people familiar with the plans. From the report: Banks such as Goldman will not touch cryptocurrency spot markets but lean towards synthetic crypto products such as futures. Emulating tri-party repo type arrangements (a way of borrowing funds by selling securities with an agreement to repurchase them, involving a third-party agent), banks are exploring ways to follow the same path of not touching bitcoin, like other synthetic products. It's an opportunity that lays the groundwork for more integrated crypto prime brokerage services in the future, according to the sources CoinDesk spoke with. It's also a continuation of Wall Street's relatively sudden embrace of a $2.7 trillion asset class -- albeit with somewhat niche products. "Goldman was working on getting approved for lending against collateral and tri-party repo," said one of the people. "And if they had a liquidation agent, then they were just doing secured lending without ever having bitcoin touch their balance sheet."

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