Institutions can now borrow USD or USDT using digital assets.
Compound Treasury, a decentralized finance (DeFi) lending platform, has launched “an institutional cash management solution.”
According to the press release shared on September 14th, various institutions can now borrow from Compound Treasury by using digital assets as collateral.
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Various fintech, crypto companies, and banks are offered the ability to borrow USD or USDC using Bitcoin (BTC), Ether (ETH), or other ERC-20 assets. The company offers a 6% annual percentage rate (APR).
Moreover, the company adds that there are no open-ended terms or repayment schedules when institutions are expected to repay their balances. The companies can choose their own timing as long as “they remain overcollateralized.”
According to the DeFi lending platform, the decision to launch borrowings for institutions was partially enforced due to current market volatility with increasingly growing demand for liquidity.
The Vice President and general manager Reid Cuming noted:
Compound Treasury can now address demand for liquidity with a simple, reliable borrowing solution, while continuing to provide the same trusted 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.
In its press release, Compound Treasury emphasizes that to ensure fund transparency and safety collateral doesn’t leave the lending platform’s control.
The company claims that its goal is to become “the most trusted and transparent partner for institutions to access the core benefits of DeFi.”
The announcement about the new services comes after in May Compound Treasury received a B- credit rating from S&P Global Ratings. It made Compound Treasury the first DeFi company rated by a major credit rating agency.
