The mysterious corporation that took out Wall Street’s first bitcoin-backed loan from Goldman Sachs has been exposed as Coinbase, America’s largest crypto exchange. Goldman Sachs controls $2.5 trillion in assets as of 2021.
Coinbase has taken out a Bitcoin-backed loan from Goldman Sachs, according to Bloomberg, as part of a strategy to strengthen ties between the crypto and trading worlds.
Coinbase Institutional Head Brett Tejpaul said, “Coinbase’s work with Goldman is a first step in the recognition of crypto as collateral, which deepens the bridge between the fiat and crypto economies.”
The loan’s cash amount was not disclosed, but it was backed by a portion of Coinbase’s total holdings of 4,487 Bitcoin, which are presently valued at almost $170 million. The loan includes a 24-hour risk monitoring system, as well as a requirement that Coinbase fills up its BTC collateral if prices fall too low.
Coinbase’s first bitcoin-backed loan
While Bitcoin and other crypto-backed loans are common in the crypto industry, particularly on DeFi protocols, they are uncommon in traditional banking, where crypto is seen as far too risky and unpredictable as collateral.
Asset management firm Arca indicated in a May 2 blog post that potential borrowers are looking for more such opportunities. It claimed that “[this loan] demonstrates institutions’ willingness to utilize new tools with traditional methods.”
Brian Armstrong on free speech
Meanwhile, Coinbase CEO Brian Armstrong has laid out his vision for decentralized social media networks that allow for free speech.
He told the Milken Institute on May 2 that Twitter, now owned by Elon Musk, had the opportunity to “essentially embrace adopting a decentralized protocol” that the network could function on.
“I believe that freedom in all forms is worth preserving, and a lot of crypto is about economic liberty.” Another version is the right to free speech.”
Armstrong argues that a decentralized social media network would enable content producers to choose their own moderation standards. Access to all material would be democratized rather than algorithmically determined.
This would prevent certain content streams on a platform from being stifled, allowing users to see whatever they want.