Goldman Sachs considering offering Bitcoin-backed loans

2021 was when Bitcoin recorded the most gains in terms of adoption. The primary cryptocurrency has evolved from being used solely for speculative purposes, and it has found its way into the funds of major institutional players.

Despite the volatility that Bitcoin’s price undergoes, some Wall Street banks have announced plans to consider the use of Bitcoin as collateral for loan applications. Moreover, these financial institutions are also looking towards crypto derivatives.

Goldman Sachs considering adopting Bitcoin for loan collateral

Goldman Sachs is taking the lead position among the major financial institutions considering the use of Bitcoin as an asset class that can be used to guarantee loans by working as collateral.

According to an inside source with knowledge of the matter, the banking institution is currently seeking approval to offer institutional lending using Bitcoin. If such an approval happens, it could be a major turning point for the use of Bitcoin in the investment and financial sectors.

However, Sachs is not the only financial institution considering the use of Bitcoin for this purpose. Other major financial players such as Silvergate and Signature are also planning on launching crypto-backed loans.

Bitcoin in the mainstream financial system

The idea of incorporating Bitcoin into the mainstream financial systems stems from recent remarks made by the chief of the Comptroller of Currency (OCC), Brian Brooks. Brooks stated that Bitcoin was the same as fiat currency, and banks needed to find a safe way of preserving it.

Many financial institutions are currently looking for ways to add Bitcoin offerings into their services. This comes as regulators in the US struggle with ways to regulate the cryptocurrency sector.

Coinbase, a leading exchange in the US, is currently looking for partnerships with US banks to offer Bitcoin-backed lending services.

The current adoption of cryptocurrencies by banking institutions has come from the increased demand by customers. While some banks only allow their customers to invest in funds that give them crypto exposure, others have launched direct Bitcoin products. However, most of these banking institutions have set the limit for crypto investing to professional investors.

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• How to buy cryptocurrencies
• How to buy bitcoin