Renowned cryptocurrency lending platform ‘Nexo’ recently today on 25th March, opened the choices of employing PAXG [PAX Gold] as collateral against its loans to retail investors. A pilot scheme that was revealed earlier in 2019 was limited to institutional clients and purportedly saw immediate demand for its gold-backed credit lines.
Nexo’s announcement means collateralized borrowing against high-grade gold is now no longer the preserve of the ultra-rich.
Revealed earlier in September last year, ‘Paxos’ PAX Gold token is fully-backed by & redeemable for physical gold, secured in secure vaults.
Each token represents one fine troy-ounce of LGDG [London Good Delivery Gold], & permits ownership of gold as a safe-haven asset, with the added convenience afforded by tokenization.
Prompting $5 Million Investment Scheme
Nexo saw such demand for gold-backed credit from institutional clients within its pilot scheme, thereby investing in $5 Mln worth of PAXG to satisfy its investors’ needs.
The expansion of this pilot to incorporate retail clients now allows anyone to leverage gold-backed PAXG assets as collateral on the Nexo platform.
Mentioning further, the co-founder of Nexo named ‘Antoni Trenchev’, explained the allure:
“Especially in high-volatility times, as within the present, gold is desired by many of our retail clients & we have worked towards reflecting their wishes.”
As ‘reported‘ earlier, the crypto-currency loans industry is observing solid growths over some time, as many cryptocurrency holders prefer to better leverage their assets as collateral rather liquidating them.