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Digital bank Anchorage debuts Ethereum-backed loans for institutions

CryptocurrencyJun 04, 2021 05:00PM ET
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© Reuters Digital bank Anchorage debuts Ethereum-backed loans for institutions

Digital asset bank Anchorage will now allow institutional investors to access USD loans without having to liquidate their ETH holdings.

The crypto-backed loan option is made possible through a partnership with U.S. commercial bank BankProv, Anchorage disclosed in an official post. The new product will allow clients who store their ETH with Anchorage to put their digital assets to work. While Anchorage will continue to hold the ETH as collateral, BankProv will provide credit denominated in US dollars.

It is worth noting that this is not the first time that Anchorage is debiting a lending product. The firm already inked a deal with Silvergate digital asset bank to offer Bitcoin-backed loans. The Bitcoin loan product essentially functions the same way, with Anchorage handling the collateral administration while Silvergate offers credit in dollars.

According to Anchorage co-founder Diogo Monica, the ETH-backed loan may attract lower collateral if the borrow scales through appropriate risk due diligence checks. Meanwhile, the CEO of BankProv Dave Mansfield lauded Anchorage for its “world-class” collateral management tech. He said:

We firmly believe in our mission and belief that the crypto market should be afforded the same access and rights to traditional financing tools as any other legal, well-capitalized and compliant business in America.

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Digital bank Anchorage debuts Ethereum-backed loans for institutions
 

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