Coinbase To Back Bitcoin Loans For Goldman Sachs; CEO Predicts 1 Billion Crypto Users Within 10 Years

Details of the lending facility and its various criteria has been kept under wraps so far.

Coinbase is one of the largest cryptocurrency exchanges in the US

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Coinbase is said to be working with Wall Street bank Goldman Sachs on loans which will have Bitcoins as a collateral. Coinbase is one of the largest cryptocurrency exchanges in the US, with a focus on facilitating easy transactions for amateur users in the sector. Separately, Coinbase CEO Brian Armstrong believes one billion people will use or at least try their hand in crypto within the next 10 years. Armstrong made the prediction while speaking at the annual Milken Institute Global Conference. 

On May 2, while speaking at a session with ARK Invest founder and CEO Cathie Wood at the conference, Armstrong said, “My guess is that in 10-20 years, we’ll see a substantial portion of GDP happening in the crypto economy.” While the Coinbase chief remains optimistic, the overall crypto market is failing to scale new heights since Bitcoin hit an all-time high of $69,000 in November 2021. As per a report by Bloomberg, the world’s oldest cryptocurrency has seen a decline of nearly 17 percent since the beginning of this year.

On May 3, another report by Bloomberg said that Coinbase will collaborate with Goldman Sachs to facilitate crypto-collaterised loans. Last week, Goldman Sachs announced Bitcoin-backed loans, in a first for the investment banking leader. Coinbase Institutional Head Brett Tejpaul told Bloomberg, “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.”

Details of the newly announced lending facility and its various criteria has been kept under wraps so far. ABP Live has reached out to Coinbase for more information. This report will be updated when the company responds.

While Goldman Sachs traded its first-ever over-the-counter Bitcoin options in March, the concept of Bitcoin-backed loans is still new for Wall Street institutions. In the sector, crypto loans reportedly sees borrowers supplying BTC at loan-to-value within a range of 40-60 percent. 

Teaming up with US-based Silvergate Bank and Signature Bank, Coinbase has already structured crypto loans, and it is reportedly working with large investment banks to develop similar structures.