Goldman Sachs, one of the leading investment banks in its long history, extended a fiat currency loan secured by bitcoins for the first time in its history.
We recently expanded our credit line and lent against bitcoins held by the borrower. The deal was unusual because of its structure and the use of a 24/7 risk management system,” Goldman Sachs said in a press release.
Bitcoin rate fluctuates in a fairly wide range, so issuing loans secured by cryptocurrency carries an increased risk. In this regard, the bank decided to monitor the risks around the clock to reduce the likelihood of financial losses. Apparently, the loan was approved by employees of the digital assets department, which is headed by Matthew McDermott.
This is not the first time Goldman Sachs has launched a new service related to virtual currencies this year. In March, the company executed its first over-the-counter transaction to sell a non-deliverable bitcoin option. The bank processed the transaction in conjunction with Galaxy Digital, a crypto firm that invests in bitcoin and Ethereum (ETH).