Crypto-lending platform Nexo has at the moment, March 25, opened up the choice of utilizing PAX Gold (PAXG) as collateral in opposition to its loans to retail buyers. A pilot scheme in late 2019 was restricted to institutional purchasers and purportedly noticed rapid demand for its gold-backed credit score traces.
Nexo’s announcement signifies that collateralized borrowing in opposition to high-grade gold is now now not the protect of the ultra-rich.
Launched in September 2019, Paxos’ PAX Gold token is fully-backed by and redeemable for bodily gold, saved in safe vaults.
Every token represents one superb troy ounce of London Good Supply Gold, and permits possession of gold as a safe-haven asset, with the added comfort afforded by tokenization.
Pilot scheme prompts $5 million funding
Nexo noticed such demand for gold-backed credit score from institutional purchasers throughout its pilot scheme that it invested in $5 million price of PAXG to satisfy buyers’ wants.
The enlargement of this pilot to incorporate retail purchasers now permits anybody to leverage gold-backed PAXG property as collateral on the Nexo platform. Antoni Trenchev, co-founder of Nexo, defined the attract:
“Particularly in high-volatility instances, as within the current, gold is wanted by a lot of our retail purchasers and we now have labored in direction of reflecting their needs.”
As Cointelegraph reported, the crypto loans trade has seen stable development, as many cryptocurrency holders desire to leverage their property as collateral quite than liquidate them.