BitGo (NYSE: $BTGO) has launched a new financing platform that allows institutions to borrow and lend against a range of cryptocurrency holdings.
The platform brings together features such as borrowing, lending, and collateral management, and removes the need for multiple counterparties.
Instead of setting aside collateral for individual loans, the platform uses a portfolio-based structure that allows clients to access liquidity from a pool of digital assets held in custody, such as Bitcoin (CRYPTO: $BTC) and Ethereum (CRYPTO: $ETH).
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“That combination of flexibility, service, and control is what institutions have been missing in digital asset markets,” said BitGo in a written statement.
Support for staked and locked crypto adds another layer to the new financing platform, allowing borrowers to access liquidity without exiting positions.
Institutional clients can also lend assets from the same account, either to generate yield or to free up capital for trading and crypto purchases.
Demand for credit against cryptocurrency holdings has risen over the past year, and this has led exchanges and decentralized finance (DeFi) platforms to expand their lending offerings.
Leading players in this space include Anchorage Digital, which has introduced Bitcoin-backed stablecoin loans and short-term yield strategies for institutional investors.
At the same time, platforms such as Kraken have rolled out products such as Flexline, offering fixed-term crypto-backed loans to clients.
BTGO stock has declined 55% over the past 12 months to trade at $8.23 U.S. per share.