Goldman Sachs and other US investment banks are considering the option of organizing tri-party repo transactions with collateral in the form of Bitcoin futures. CoinDesk writes about this with reference to sources.
Thus, the partner of Goldman Sachs is Mike Novogratz’s Galaxy Digital crypto bank. The latter is an agent of an investment bank in the cryptocurrency market; in over-the-counter spot and futures trading, lending and the creation of structural products.
Furthermore, according to media reports, the bank is considering other synthetic products without the participation of the spot version of the first cryptocurrency.
Balance sheet to make the loan
“Goldman was working on getting approved for lending against collateral and tri-party repo. And if they had a liquidation agent, then they were just doing secured lending without ever having Bitcoin touch their balance sheet,” the sources explained.
According to industry representatives interviewed, Goldman Sachs is creating the basis for more integrated prime brokerage services. Currently, digital asset-friendly banks Signature and Silvergate are offering similar Bitcoin-backed loans.
“We’ve probably spoken to half a dozen big banks about (bitcoin-backed loans). Some of them are in the next three to six months category and some are further out. What’s interesting is some of these banks will use their own balance sheet to make the loan. Others will syndicate this out,” explained the publication.
Earlier in July 2020, the Office of the Comptroller of the Currency (OCC) as part of the U.S. Treasury Department allowed national banks to provide cryptocurrency storage services.
In general, regulatory uncertainty remains in this regard. Previously in May, an “Oversight of Prudential Regulators” was launched with the participation of the Fed, FDIC and OCC, which will continue in 2022. A group of regulators will issue clarifications regarding the types of activities related to cryptocurrencies that are legally permissible for banks.