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Anchorage offers Ethereum-backed loans

Photo of: Joseph Stone
by Joseph Stone

Anchorage Digital is now offering institutional clients the ability to have dollar loans without having to liquidate their Etherereum.

In response to Bitcoin’s falling price, institutional investors are turning to Ethereum investment products in increasing numbers. As of last week, over 63% of institutional inflows were into these products.

The crypto market among institutions is of interest to a number of players, including fintech Anchorage Digital. The crypto bank already offers various services for this clientele, including custodoy.

In a release, Anchorage Digital announces a new offer. It is about loans in dollars with Ether as collateral. To provide these credit lines, the company is partnering with a commercial bank, BankProv.

Ex-Provident Bank, the establishment is one of the ten oldest in the United States, operating in this market for over 200 years. This parameter is likely to reassure institutional investors tempted by Anchorage Digital’s crypto loans.

Its offer is simple. To have liquidity, investors usually proceed to sell their cryptocurrencies, in this case Ether. The fintech offers them to keep their ETH, and in return provide a loan.

“For crypto-native funds that have investments in Ethereum and a need for capital, Anchorage Financing brings a simple way to make their Ether work while keeping it, providing USD to meet their needs without liquidating their holdings,” it justifies.

Anchorage Digital is therefore continuing its strategy of developing financial tools for the cryptocurrency market. The player therefore provides custody for institutions, but also a whole suite of financial products.

This includes financing, brokerage, staking, governance, and now also loans. For the moment, these credit lines are only offered with Ether as collateral. But the firm may accept other crypto-assets in the future.

Anchorage was the first crypto company to receive approval from the U.S. national banking regulator in January. A month later, it raised $80 million. Participating in the funding round were Andreessen Horowitz and Blockchain Capital, among others.