Coinbase, America’s largest crypto exchange, has been revealed as the mystery firm that took Wall Street’s first bitcoin- (BTC)-backed loan from Goldman Sachs.
Goldman Sachs has $2.5 trillion in assets under management as of 2021.
Bloomberg reported Tuesday that the bitcoin-backed loan issued by Goldman Sachs was taken over by Coinbase as a way to deepen ties between the crypto and traditional finance (TradeFi) worlds, with head of Coinbase Institutional Brett Tezpaul said. said:
“Coinbase’s work with Goldman is the first step in recognizing crypto as collateral that deepens the bridge between the fiat and crypto economies.”
The dollar value of the loan has not been disclosed, but it was collateralized by a portion of Coinbase’s total holdings of 4,487 BTC, valued at approximately $170 million at the time of writing. The loan has 24-hour risk management, but it requires Coinbase to top up its BTC collateral if the price drops too low.
While bitcoin-backed and other crypto-backed loans are common in the crypto industry, especially on decentralized finance (DeFi) protocols, they are curious about traditional finance, where crypto is considered too risky and volatile as collateral. Is.
However, asset management firm Arca wrote in a blog post on Monday that potential borrowers are looking for more such options. it said, “[This loan] Demonstrates the willingness of institutions to use new tools alongside older technologies:
“It is far more likely that Goldman is seeing a lot of demand for these types of transactions and is just testing the waters before making a big splash.”
News of the bitcoin-backed loan triggered commentary on Twitter. With regards to debt, bitcoin podcaster Preston Pieshow tweeted Wednesday: “No wonder the SEC is hiring people.”
Armstrong on social media
Meanwhile, Coinbase CEO Brian Armstrong has laid out his vision to enable free speech through a decentralized social media platform. He told the Milken Institute on Monday that under new owner Elon Musk, Twitter has an opportunity to “essentially embrace using the decentralized protocols on which the platform can operate.”
“I think freedom in all forms is worth defending and crypto, a lot of it is about economic freedom. Freedom of expression is another version.”
Armstrong believes that a decentralized social media platform would allow content creators to create their own moderation policies, while access to all content would be democratized rather than algorithmic. This will prevent certain content streams from being intercepted on a platform and allow users to watch whatever they choose.
related: Coinbase CEO Responds to Insider Trading Allegations with Change in Token Listing
If Twitter doesn’t embrace the opportunity, Armstrong pointed out that there are already teams working on a decentralized social media platform, which he called DSO, where users can identify themselves on the platform.
Twitter founder Jack Dorsey has been working since 2019 on a decentralized social media platform called BlueSky, which operates independently of Twitter. Bluesky aims to embrace technology where “producers have control over the relationship with their audience, and developers have the freedom to build.”
Given the growing interest in the future of Twitter, we thought this would be a good time to clarify the relationship between BlueSky and Twitter.
— bluesky (@bluesky) April 25, 2022
