With the financing of its first bitcoin-backed credit to a borrower, Goldman Sachs, the world’s largest investment bank, has taken a significant step toward institutionalizing cryptocurrency adoption on Wall Street.
This type of loan may be more risky than typical asset-backed loans because of the volatility of Bitcoin.
Bank of America’s secured lending facility granted approval for the loan.
The bitcoin-backed loan allows bitcoin owners to pledge their bitcoins as collateral to a bank in exchange for a loan in fiat currency, such as the United States dollar (USD).
Last month, Goldman Sachs and Galaxy Digital were the first financial institutions to successfully trade over-the-counter bitcoin options.
One of Goldman Sachs’ customers was able to obtain a cash loan secured by Bitcoin as collateral for the first time in the company’s history.
In addition to these signs, there have been a number of other signals that Goldman Sachs’ fellow Wall Street corporations are speeding up their efforts to enter the bitcoin market.