This offering targets investors that seek to convert their BTC into cash without selling.
Fidelity Digital Assets will only hold the BTC and will not play any part in setting loan terms.
Per BlockFi’s CEO, the firm will offer cash loans worth 60% of the backing asset.
Fidelity Digital Assets, the crypto arm of Fidelity Investments, a leading asset manager, has joined hands with BlockFi, a renowned crypto lender, to let its institutional investors pledge BTC as collateral against cash loans. A report unveiled this news on December 7, noting that Fidelity Digital Assets would only hold the crypto and will not play any part in setting loan terms. Reportedly, this offering targets BTC investors that seek to convert their BTC into cash without selling. As such, potential customers will be hedge funds, crypto miners, and over-the-counter (OTC) trading desks.
Fidelity Digital Assets and BlockFi Launch Bitcoin-Collateralized Cash Loans for Institutions
Dec 10 2020 · 09:00 UTC by Bhushan Akolkar · 3 min read
Photo: Depositphotos
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The penetration of Bitcoin in mainstream finance and the rising demand from institutions pushed Fidelity to come with offers of Bitcoin-backed cash loans. BlockFi will handle all the loan disbursement process while Fidelity Digital Assets will hold BTC as collateral in its custody.
Fidelity Digital Assets, the cryptocurrency arm of Fidelity Investments, has decided to roll out cash loans with Bitcoin collateral, in partnership with blockchain startup BlockFi. As per the deal, BlockFi will offer cash that is worth 60% of the loan backed by Bitcoin.