Goldman Sachs Offers Its First ‘Bitcoin-Backed’ Loan

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Goldman Sachs Offers First ‘Bitcoin-Backed’ Loan; Crypto-Backed Real Estate is Now a Thing
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Wall Street is moving closer to cryptocurrencies as Goldman Sachs offers its first bitcoin-backed loan on Thursday, according to Bloomberg.

Secured Lending Facility allows borrowers to use Bitcoin (BTC) as collateral for cash loans. Under this arrangement, Bitcoin holders are able to obtain fiat currency — U.S. dollars — in exchange for their Bitcoins as collateral for the bank.

At last. If the price of Bitcoin falls, borrowers may need to increase their collateral. If they fail to provide the necessary collateral, they risk liquidation.

Goldman Sachs joins a growing list

While Bloomberg did not report specifics on the loan, a Goldman spokesman did call the nature of the loan “interesting” because of its structure and 24/7 risk management.

Minergate

Recently, bitcoin-backed loans have become popular among bitcoin mining companies, as companies that earn revenue in BTC also need to pay their overhead and operating costs in USD or other currencies.

Goldman is now following other traditional financial groups, including BlackRock (BLK), which participated in USDC stablecoin creator Circle’s $400 million funding round.

crypto-backed real estate

Back in February, Propy made waves in the US after selling a Florida home that became the first real estate-backed NFT in the US. The home in Tampa, Florida, sold for $653,163 (210 ETH).

This week, blockchain real estate platform Propy announced that customers can now put their digital assets as collateral for real estate purchased through crypto lending service Abra Borrow. The cryptocurrency staked on Abra is then used to borrow dollars, which can then be used to buy a home.

Regardless of how the transaction is conducted (fiat, cryptocurrency or NFT), it is still recorded on the blockchain, which ultimately serves as the legal and technical framework for all buyers of the transaction.

Yes[In]Crypto has reached out to Propy and its CEO Natalia Karayaneva for additional comment and will update this story accordingly.

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