Renowned crypto lending firm Nexo has opened up the possibility of retail investors to use PAX Gold (PAXG) as a collateral option against loans. The firm had previously launched a pilot scheme on the same but the services were only available to institutional investors only. The pilot saw a high demand for the gold-backed credit lines and the firm has decided to extend the service to retail investors.
The announcement signifies that collateralized borrowing backed by high-grade gold can be extended to everyone and not only the rich.
PAX Gold token was introduced in September last year and is entirely backed by as well as redeemable for actual gold which is currently kept in Brink’s vaults. Every token is backed by ‘fine troy ounce of London Good Delivery Gold’ that allows the user to own gold which is a safe-haven asset. Tokenization adds to the convenience of the safe-haven asset.
During the pilot phase, there was a high demand for its gold-backed credit among the institutional customers such that the firm had to invest an extra $5 million in PAXG to satisfy the investors demand.
The expanded scheme that will rope in the retail customers will enable everyone to take advantage of gold-backed PAXG assets using it as collateral within the Nexo platform.
According to Nexo co-founder, gold backed PAXG is highly relevant more so during high volatility times like currently and majority of retail clients have been seeking for such a service. He explained:
“Especially in high-volatility times, as in the present, gold is sought after by many of our retail clients and we have worked towards reflecting their wishes.”
The crypto loans sector has been growing rapidly in the recent past as the majority of crypto owners or holders are looking to use their assets as collateral as opposed to liquidating them.
Nexo enjoys the backing of Michael Arrington, TechCrunch founder, and was able to raise $52.5 million during a private token sale back in 2018.
Published at Wed, 25 Mar 2020 20:26:30 +0000