Big Crypto Push! Major US Investment Bank Goldman Sachs Lends Its First Bitcoin-Backed Loan

Over a month after becoming the first major US bank to announce over-the-counter crypto trading, Goldman Sachs has taken another big step towards the crypto push.

Goldman Sachs has offered its first-ever lending facility backed by Bitcoin. This is a significant step for the major U.S. bank that accelerates Wall Street¡¯s embrace of cryptocurrencies.

The secured loan was lent as cash against Bitcoin pledged as collateral by the borrower.

A spokeswoman for Goldman Sachs said in an email, ¡±The deal was interesting to Goldman because of its structure and 24-hour risk management¡±, as per a report in Bloomberg.

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Also Read: Germany Ranked World¡¯s Most Crypto-friendly Country, China At The Bottom Of The List

Surge in Crypto Price & Popularity Chipping Away Resistance

After years of resistance, the surge in price and popularity of crypto have been making Wall Street banks ramp up their crypto offerings.

Besides Goldman Sachs, other investment banks have been taking steps toward crypto.

Jefferies Financial Group is expanding banking services for crypto clients, while BlackRock Inc. has joined a $400 million funding round in stablecoin firm Circle this month. Boutique investment bank Cowen Inc. too, started a digital assets unit in March 2022, as per Bloomberg.

So with Goldman not being alone in its foray into digital assets, it's fair to say that crypto adoption is gradually pacing up amid Wall Street banks, with some other banks also ramping up their movements into the cryptocurrency space.

So far, crypto-friendly banks, including Silvergate Capital Corp, have already provided U.S. dollar loans backed by Bitcoin, as per Bloomberg.

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A couple of days back, multi-trillion-dollar asset management firm BlackRock announced the launch of a blockchain-focused ETF. Earlier this month the firm had also announced its involvement in a $400M funding round and partnership with Circle, the principal operator of the USDC stablecoin, as per Bloomberg.

Moreover, for Goldman, which traded its first over-the-counter Bitcoin options in March 2022 and has a digital-assets team, this step signals entry into a new business line that¡¯s otherwise currently the domain of firms more specialized in crypto. The OTC crypto transaction was executed last month in collaboration with the trading unit of Michael Novogratz¡¯s crypto investment firm Galaxy Digital.

In another big step towards crypto, the world's first country to adopt bitcoin as legal tender, El Salvador, is currently in the process of securing finances for its volcano bond.

It is a Bitcoin-backed government bond that will be used to amass $1 billion in funding for the development of ¡°Bitcoin City¡± and to increase the size of the country¡¯s Bitcoin reserves.

Also Read: Dubai Passes First-of-its-kind Law To Regulate Crypto And NFTs

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