Compound Treasury: Digital Assets Can Be Used as Collateral for Borrowing USD or USDC
A cash management solution powered by the Compound Protocol, Compound Treasury, announced on September 14 that it would offer institutions fixed interest rates starting at 6% APR for USD or USDC loans. As collateral, accredited institutions can use Bitcoins (BTC), Ethers (ETH), and supported ERC-20 assets.?
The crucial aspect of institutions in the crypto space is that they bring high volumes and inflows to the crypto space, while also making crypto more credible. There have been a significant number of companies catering to these institutions as a result of their significant growth.
Crypto companies, FinTech institutions, and banks are among the notable clients of Compound Treasury, who were influenced by recent market volatility.?
Compound Treasury's vice president, Reid Cuming, explained, “Compound Treasury can now address the demand for liquidity with 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."
Providing clients with flexible borrowing, the company said, as long as they remain over-collateralized, the terms will remain open-ended. As a result, Compound Treasury will maintain control of collateral provided by borrowing institutions, increasing transparency and security.
Another Compound Governance company offering lending and borrowing, Compound Finance, has seen investors' interest drop in recent years. Since November 2021, bearish market conditions have led to a decline of $2.65 billion in deposits and -$358 million in loans on the protocol.?
CBW - External Analyst