Fidelity and BlockFi start issuing loans secured by bitcoin.

in LeoFinance5 years ago

The digital assets division of Fidelity Investments will allow institutional clients to use bitcoins as collateral for cash loans, Bloomberg reported . Fidelity Digital Assets President Tom Jessop clarified that his company will hold digital assets, not lend. According to him, the service will potentially interest hedge funds, miners and OTC platforms: “The loans will be longer term than a regular repo transaction. As markets grow, we expect this to become a fairly important part of the ecosystem. " Fidelity Investments is launching a new service in partnership with startup BlockFi. To obtain a loan, a Fidelity client must have an account with BlockFi. BlockFi chief executive Zach Prince said his company will manage volatility risks by offering 60% of the loan backed by Bitcoin. He added: "However, the program has room for customization at the client level and can be adapted to meet the needs of large companies." As a reminder, in October 2019, Fidelity Investments launched a custodian service for institutional bitcoin investors.

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