Goldman Sachs and a handful of other Wall Street banks are exploring ways to do institutional cash loans with bitcoin as collateral, CoinDesk reported. The report cited three people familiar with the plans of a group of tier-one U.S. banking institutions interested in the activity.

However, most banks would not custody “physical” bitcoin to make the loans but instead, resort to synthetic products such as futures.

The idea is to emulate tri-party repo agreements, the report said. It is a type of repurchase agreement in which a third-party agent facilitates the transaction between buyer and seller by taking custody of the collateral and ensuring proper delivery of cash and the involved assets to each party as per the agreement’s terms.

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