The crypto industry, over the course of this year, has seen leading institutions step up their efforts to create different kinds of products in a bid to further the reach of cryptocurrencies.
Crypto assets are growing in value, and many people have begun engaging in the trade of this asset class.
Tagomi, one of the leading cryptocurrency broker agencies, has announced that it is launching a lending and borrowing platform for cryptocurrency.
The agency is working on creating a market structure similar to Wall Street for cryptocurrency. The lending and borrowing platform takes Tagomi a step further towards achieving the setup of a Wall Street like structure.
Lending and borrowing cryptocurrency
Tagomi made the announcement of the lending and borrowing platform for the firm’s institutional clients.
These clients will be able to borrow the two leading cryptocurrencies, Bitcoin and Ethereum, from several institutions which are in business with Tagomi. Any Bitcoin trader will be able to access the facilities provided by Tagomi.
Some of the institutions, from which the crypto funds will come from, including traditional hedge fund firms and over the counter trading desks which deal with crypto assets.
Other institutions involved provide Bitcoin future products for institutional investors. According to Kevin Johnson, the COO of Tagomi, the aim of these services is to enable clients to sell short in one go.
Dennis Chou, director of trading at Pantera Capital, said that lending and borrowing facilities are common among traditional asset classes, and hence, institutional investors on traditional platforms take such facilities for granted. In the crypto industry, these facilities are not available on a large scale basis.
The creation of such a platform by Tagomi will bring a much needed service into the crypto industry, and it could be a vital key in the progression of the asset class into mainstream adoption.
Johnson added that to facilitate short trades, or to lend the assets in their holdings, crypto investors have to look at a number of different lending platforms independently and then they have to manage their portfolios on these platforms separately.
This process is long and winding, unlike lending and borrowing platforms for traditional asset classes which make such processes short and direct.
Tagomi leading the pack
Tagomi was founded in 2017, and the firm was one of the first prime brokers for cryptocurrency. Brokerage services are common among traditional assets, but prior to Tagomi, the service was not widely available for crypto institutional investors.
The company is backed by some top firms such as Pantera Capital, Thiel’s Founders Fund, and Digital Currency Group.
Tagomi has now created a unique borrowing and lending platform for digital assets, and it promises to be a leading platform in the industry.
Tagomi has differed itself from most cryptocurrency platforms which have exchanges as lending partners. Tagomi has also created provision for better collateral and interest rates across its various counterparties.