An exchange looking to replicate securities lending for digital assets will launch on 3 September to institutional clients.
LendingBlock is aiming to provide institutional investors with a ‘secure and liquid’ way to lend and borrow cryptocurrencies, mirroring an important element of traditional markets.3
According to the exchange, its clients include a mix of hedge funds, market makers, trading houses, OTC providers, crypto lending firms, and exchanges.
The platform plans to launch with users able to borrow and lend BTC, ETH, PAX and USDT on a fully collateralised basis, for loan terms of one, seven, 14 and 30 days, with a minimum trade size of $100,000.
Borrow and lend orders will be matched automatically with LendingBlock acting as settlement agent in the transaction.
“We see the LendingBlock exchange as a key piece of market infrastructure that will provide efficiencies and support healthy markets in the crypto economy,” said LendingBlock CEO, Steve Swain.
“We look forward to bringing the first institutional lending exchange to market and believe it will play an essential role in facilitating clients’ trading strategies and also in helping the crypto market infrastructure to mature.”
LendingBlock confirmed that it will manage the entire loan lifecycle, actively managing the collateral through the term of the loan to ensure maintenance of sufficient collateral to fully secure the loan.
The platform charges a fee for the arrangement of the loan and the management of the collateral.
In June, LendingBlock launched a framework using master agreements typically seen from incumbent capital markets bodies, in a bid to protect both parties in the exchange.
The Global Digital Assets Lending Agreement (GDALA) was developed by LendingBlock, with legal counsel and support from Norton Rose Fulbright.
The platform, targeting institutional investors, will use master agreements framework similar to ISLA’s Global Master Securities Lending Agreements, ICMA/SIFMA’s Global Master Repurchase Agreements and ISDA’s Master Agreements.