Digital asset bank Anchorage is expanding its lending services to institutional clients, allowing them to access Ethereum-backed loans on its platform.
Anchorage expands lending services to institutional clients
The lending sector has grown massively in the cryptocurrency industry over the past few months. Decentralized finance (DeFi) projects are designed to allow users to borrow and lend money without an intermediary.
Anchorage is one of the leading firms in this area, and the digital asset bank has now partnered with BankProv to provide lending services to institutional clients. The company announced this via a medium blog post yesterday. “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. BankProv is the tenth oldest bank in America, operating for over 200 years as The Provident Bank before its modern rebrand in 2020,” Anchorage wrote.
This latest product would allow institutional clients that custody their Ether (ETH) with Anchorage to use the assets and access loans. Anchorage will continue to hold the Ether coins as collateral, while BankProv will provide the lines of credit denominated in the US Dollars and backed by Ether.
This isn’t the first time Anchorage is offering such a service. The digital asset bank already offers BTC-backed loans through its partnership with Silvergate digital asset bank. The BTC-backed loan works the same way, with Anchorage holding the BTC as collateral while Silvergate extends the line of credit to the institutional investors.
Dave Mansfield, CEO of BankProv, said, “We firmly believe in our mission and belief that the crypto market should be afforded the same access and rights to traditional financing tools as any other legal, well-capitalized and compliant business in America.”
Crypto lending platforms are becoming popular
The cryptocurrency market is offering a decentralized way of providing financial services. Unlike the traditional financial systems, the cryptocurrency space has eliminated the need for intermediaries, making the transactions faster, cheaper and more transparent.
As the cryptocurrency and DeFi market continues to grow, more companies would provide decentralized financial services to their clients.