Goldman Sachs Offers First ‘Bitcoin-Backed’ Loan; Crypto-Backed Real Estate is Now a Thing.

Wall Street is moving its feet closer into crypto, as Goldman Sachs offered its first bitcoin-backed loan on Thursday, according to Bloomberg News.

The secured lending facility allowed a borrower to use bitcoin (BTC) as collateral for a cash loan. Under this arrangement, a bitcoin holder is able to obtain fiat money – U.S. dollars in exchange for putting up their BTC as collateral to the bank.

Consequently. if the price of bitcoin drops, the borrower may be required to increase their collateral. In the event they fail to put up the necessary collateral, they risk liquidation.

Goldman Sachs joins a growing list

While Bloomberg did not report the specific details of the loan, a Goldman Sachs spokesperson did call the nature of the loan “interesting,” due to its structure and 24/7 risk management.

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 U.S. dollar or other currencies.

Goldman Sachs now follows other traditional finance conglomerates, including BlackRock (BLK), which participated in a $400 million funding round for USDC stablecoin creator Circle.

Crypto backed real estate

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

This week, blockchain real estate platform, Propy announced that customers are now able to put up their own digital assets as collateral for real estate purchases made through Abra Borrow, a crypto lending and borrowing service. The crypto that is pledged on Abra is then used to borrow U.S. dollars which can then be applied to home purchases.

Regardless of how the transaction is made (fiat, crypto, or NFTs), it is still recorded onto the blockchain, which ultimately serves as both the legal and technical frameworks for all buyers to the transaction.

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

What do you think about this subject? Write to us and tell us!

The post Goldman Sachs Offers First ‘Bitcoin-Backed’ Loan; Crypto-Backed Real Estate is Now a Thing. appeared first on BeInCrypto.

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