Compound Treasury, a cash management solution for platforms supported by the Compound protocol, recently made the announcement of allowing accredited institutions to borrow USD or USDC with fixed rates starting from six percent APR, using Bitcoin (BTC), Ether (ETH) and backed ERC-20 assets as collateral, according to Cointelegraph.
As per Cointelegraph, the decentralised finance (DeFi)-backed company which has clients such as cryptocurrency companies, financial technology (fintech) institutions and banks, stated that the decision was taken with regard to recent presence of market volatility, which has resulted in the demand for liquidity.
“Compound Treasury can now address demand for liquidity with borrowing solution, while continuing to provide the same service we’ve delivered to clients earning interest over the past year. Introducing borrowing expands our cash management product to meet more needs of our clients,” Reid Cuming, vice president, Compound Treasury, said, with regard to the initiative.
On the basis of information by Cointelegraph, through an official statement, the company made the announcement that borrowing for clients is expected to happen on a flexible basis with an open-ended term and no repayment schedule, for as long as the participating clients are remaining overcollaterised. Collateral given by borrowing institutions is not expected to go beyond Compound Treasury’s control, which would reportedly result in an increase of transparency and safety of funds.
Moreover, Cointelegraph noted that the program’s liquidity will be supplied by Compound Treasury’s clients and the Compound protocol, which currently has more than three billion dollars in assets and has acquired over $285 billion in total transaction volume since the company’s inception. The announcement by Compound Treasury has come post the company receiving a B-credit rating from S&P Global in May, 2022, which reportedly made it the first of its kind to receive a credit rating from this kind of an agency.
(With insights from Cointelegraph)
Also Read: Final Fantasy collaborates with Oasys blockchain for creation of blockchain-based games
Follow us on Twitter, Facebook, LinkedIn
