Anchorage to Offer Ethereum-Collateralized Loans

Anchorage, the institutional-focused crypto bank, will launch a USD-denominated lending service backed by Ethereum held in custody. The partner will be BankProv, one of the oldest banks in the United States.

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.

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— Anchorage Digital (@Anchorage) June 3, 2021

Crypto firms interested in a USD loan will be able to meet their needs without liquidating their Ethereum positions.

A similar product, but backed by Bitcoin, is offered to clients in cooperation with Silvergate. The latter provides USD lending financing, while Anchorage holds the digital gold as collateral.

In an interview with The Block, Anchorage CEO Diogo Monica said the initiative aims to reach a new market segment. Unlike Silvergate, BankProv has more traditional clients, which he noted can be seen as an additional step toward the adoption of digital assets.

“As soon as large investors master Bitcoin, they will be more comfortable working with Ethereum as well. In the future it will be easier for them to move to new assets, and to work with a basket.”, Monica explained.

He said he believes in a future in which cryptocurrency holders can put their assets to work through lending, while borrowers use the assets in applications outside the industry.

In January 2021, Anchorage became the holder of the first federal crypto bank license in the United States.

In February, the organization raised $80 million following a funding round.

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