From Tesla shares to bitcoin: The new secret to getting a credit line without a bank

The ultra-wealthy, many of whom hold significant fortunes in cryptocurrency, face difficulties securing flexible credit lines from traditional banks that are often hesitant to accept crypto as collateral. Jerome de Tychey, founder of Cometh, explains that sophisticated Decentralized Finance (DeFi) lending strategies are emerging as the solution. Crypto-native individuals can use platforms like Aave to borrow stablecoins against their Ether, but for less technically savvy wealthy clients, firms like Cometh structure these DeFi loans. These crypto-backed loans offer advantages over traditional Lombard loans, such as faster processing times (seconds versus days) and permissionless access without credit checks. However, they carry risks, including potential liquidation if the collateral's price drops sharply. Furthermore, Cometh is working on a 'tradfi-cation' of DeFi, exploring ways to use ISIN-based codes for tokenizing traditional assets like Tesla shares to access debt products.

(Source：CoinDesk)