Compound Treasury, a cash management solution for institutions powered by the Compound Protocol, announced on Sept. 14 that accredited institutions can now borrow USD or USDC with fixed rates starting from 6% APR, using Bitcoin (BTC), Ether (ETH), and supported ERC-20 assets as collateral.
The DeFi-backed company whose notable clients include crypto companies, fintech institutions and banks, shared that the decision was made in response to recent market volatility, which has created a more robust demand for liquidity.
Reid Cuming, vice president of Compound Treasury, said, “Compound Treasury can now address 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.” He added:
“Introducing borrowing expands our cash management product to meet more needs of our clients.”
In an official statement, the company announced that borrowing for clients will remain flexible, with “an open-ended term” and “no repayment schedule,” so long as participating clients remain overcollateralized. Collateral provided by borrowing institutions is not expected to leave Compound Treasury’s control, thereby increasing transparency and safety of funds.
Liquidity for the program will be provided by Compound Treasury’s clients and the Compound Protocol, which currently has over $3 billion in assets and has acquired more than $285 billion in total transaction volume since the company began operating.
This announcement by Compound Treasury comes after the company received a B- credit rating from S&P Global in May 2022, making the company the first of its kind to receive a credit rating from a major agency.