Finding themselves in a market that mixes with the crypto world, the big banks would have an opportunity to take advantage of digital assets. At least several banking firms would seek to develop a type of loan that is backed by collateral anchored to BTC.
The arrangement of major banks
There is a possibility that financing operations backed by cryptocurrencies will be generated in the future. Some banking firms would be behind a process of including the crypto world in operations related to loans.
On the one hand, the big banks would develop a lending system linked to BTC, and on the other, they would maintain the traditional flow of fiat currencies. They would do this in order to have guarantees protected with the digital asset, without it circulating directly between financial entities.
Of the firms involved, Goldman Sachs is one of those that most resonates with the opinions of different personalities. The market estimates a not so long period of time in which said bank, along with other well-known ones, make the new initiative official.
These loans would be carried out within a tripartite repo -type framework , taking into account the repurchase of the loaned asset.
In this sense, before the consolidation of a purchase and sale position programmed between the parties, the disposition of the banks will be protected with a guarantee in BTC. In addition to this, there could be a scenario where third-party agents are used to secure the exchange, with capital outside the main balance of these entities.
A still uncertain future
Despite the fact that the market foresees a possible new relationship between the big banks (at least 6 of them) with the crypto world, the exact moment of its application has not yet been defined. This comes in an environment where government regulations targeting Bitcoin are not fully clarified.
It is not yet certain whether the idea will really be used in new financial operations, since the banks do not dare to provide details of the matter. It seems that for now data will be known that completely clears up the doubts of investors.
Meanwhile, the regulatory entities of the economy are trying in some way to create a regulation where BTC can approach traditional finance. Given the relationship of this crypto with the banks, the SEC, the CFTC and the Office of the Currency Accountant (OCC) would have shown positive positions.
However, the regulations coming from the aforementioned entities navigate in an area that continues to be confusing. Although the new initiative could be given free rein, the regulatory framework would be adjusted in different ways, depending on the proposals that each of the large banks issues.
A loan backed with cryptocurrencies would take months or even years to arrive, due to the little openness of these banks in the face of doubts.
Nexo Partners with Fidelity to Offer Institutional Loans Secured in Bitcoin!
The eyes of traditional institutions turn to BTC, considering the possibility that firms will develop new related financial products. On this occasion, Nexo, a lending institution announced its collaboration with custodian Fidelity Digital Assets. The relationship between the two will seek to offer investors guaranteed loans with Bitcoin.
Foreign Asset Backed Agreements
The collaboration between the firms seeks to create an environment where more and more institutions access the Nexo platform. Those involved could resort to new investment products where digital assets acquire a fundamental role.
With this in mind, Fidelity Digital Assets represents the world of institutional investments, relating to the use of cryptocurrencies. Nexo will secure the loans alongside the aforementioned firm, in Bitcoin-backed deals.
This would be possible thanks to tripartite loans, a method which will serve the institutions as financial protection to ensure exchanges. Each loan may be materialized with asset repurchase agreements, recurrently used in the traditional institutional sector.
New products that take advantage of the characteristics of the crypto world will be explored, forming a scenario of more financial possibilities.
Although BTC would have a crucial role in the upcoming lending operations, its role will be limited. For now, it would serve as a backup foreign asset while institutions consolidate their traditional asset loans.
Given the actions of Nexo for the development of these loans, banking institutions would also be interested. Despite the lack of confirmation of the banks’ positions, it is rumored that the banking sector would like to enter this type of financing.
Multiple Fidelity Attempts
The announcement of the collaboration between Nexo and Fidelity is just one of several attempts by the institutional custodian to integrate BTC-related operations. For some time now, the firm has been seeking to generate products in this category for institutions.
Such was the case of its collaborations with BlockFi and Silvergate, with whom Bitcoin would also be taken into account to guarantee compliance with the agreements. From Nexo’s point of view, new loans will be «safe» with the custodian incidence.
Now, through collateral from external assets like Bitcoin, Nexo would have free rein to pitch its products to institutional investors.
Kalin Metodiev, managing partner and co-founder of the firm commented on this. «Our client base will now have full use of our industry-leading credit and trading products with a dependency on Fidelity Digital Assets’ bespoke custody and security solutions,» he said.