Institutional-oriented cryptocurrency bank Anchorage will launch a US dollar lending service with collateral in Ethereum deposited. One of the oldest US banks, BankProv, will be a partner.
Institutional clients at Anchorage now have access to a USD line of credit backed by Ethereum through our partnership with forward-thinking commercial bank @BankProv.
— Anchorage Digital (@Anchorage) June 3, 2021
Cryptocurrency firms interested in borrowing in US currency will be able to meet their needs without having to liquidate their Ethereum positions.
Anchorage offers a similar product, but secured in bitcoin, in partnership with Silvergate. The latter provides loan financing in US dollars, Anchorage provides digital gold storage as collateral.
In an interview with The Block, cryptocurrency bank head Diogo Monica said that the initiative aims to reach a new market segment. Unlike Silvergate, BankProv has more traditional clients, which can be seen as an additional step towards embracing digital assets, he stressed.
"Once big investors have mastered bitcoin, they will become more comfortable with Ethereum as well. Later on, it will be easier for them to switch to new assets and work with the basket as well," Monica explained.
He said he believes in a future where holders of cryptocurrencies can lend them for work through lending and borrowers can use the assets in applications outside of the industry.
Recall that in January 2021, Anchorage became the holder of the first US federal cryptocurrency bank licence.
In February, the organisation raised $80m in a funding round.
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