Anchorage Digital has recently made an exciting announcement for its clients currently using its services. The cryptocurrency custody bank has revealed that it is launching a new service for its institutional investors. According to the platform, it is now expanding its services more into the loaning sector.
Anchorage Digital has announced that its institutional clients would be able to apply for loans backed by cryptocurrencies. For now, the platform has announced that the institutional clients would be able to do it through Ethereum.
With the launch of the new service, institutional investors would be able to acquire loans in the form of USD. They will be able to acquire credit in USD and in different ranges backed by their Ethereum holdings.
Anchorage Digital has announced that it has managed to introduce the new product with the help of its new partner. The name of Anchorage Digital’s new partner in this venture is BankProv, which is a prominent commercial bank in the United States.
With the combined efforts of both banks; Anchorage Digital and BankProv, institutional clients will be provided access to a wide range of USD loaning options according to the new program.
The financing team at Anchorage Digital has come up with a simple and easy process to execute the loaning process. The process would prove to be extremely beneficial and favorable for the institutional investors (clients) wanting to avail of the service.
In order to acquire the loans, all the institutional investors have to do is bring their Ethereum (ETH) holdings into play. The clients would be able to deposit and hold their assets with Anchorage and acquire USD loans in return. The number of USD loans would be directly proportional to the amount of Ethereum (ETH) the investors can afford to hold.
The announcement from Anchorage Digital confirms that the investors would be able to avail themselves of the loaning services and loan amounts as long as they do not liquidate their funds.
Additionally, the users would also be able to avail themselves of the staking services, which they would be able to perform with the help of Ethereum (ETH).
The reason behind the digital bank holding on to Ethereum (ETH) is very simple and self-explanatory. The bank would hold on to Ethereum (ETH) as a backup just in case the clients take the loan and then they are unable to pay it back.
The clients willing to hold a larger amount of Ethereum (ETH) at the digital bank would be able to access higher loaning options at the exchange. Despite being the first attempt at launching an Ethereum-backed loaning service, this is not the first time, Anchorage Digital has set foot into this space.
Prior to the Ethereum-backed loaning service, Anchorage Digital already supports and provides a Bitcoin-backed loaning service.