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Many top-rated banks in the United States, including Goldman Sachs, are exploring the use of Bitcoin as collateral for granting loans to organizations.

Some individuals aware of the plan revealed to CoinDesk that the participating banks won’t involve in crypto spot markets. However, they will focus on products like synthetic crypto offerings.

Some sources revealed that it could take about three to six months to realize the product. One of the sources said:

“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.”

The plan seems to borrow the strategy from tri-party repo type arrangements. Here, the bank borrows money via the sale of securities. The money is later repurchased via a third-party agent.

Goldman Sachs has plans to join other lending institutions such as Signature and Silvergate. These two institutions have revealed their plans to provide Bitcoin-backed cash loans.

Coinbase might provide custody services

Coinbase and Fidelity Digital Assets are possible entities to support the plan on offering custody services. Furthermore, the sources claim realizing Bitcoin collateral will ensure more integrated digital asset prime brokerage services later on. Also, some lower-tier banks are also contemplating taking this step.

Most importantly, using Bitcoin as collateral seemed to be accepted under Donald Trump’s administration. This happened after the Office of the Comptroller of the Currency (OCC) claimed that Bitcoin could be equated to cash and banks.

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