Galaxy Digital Holdings LP, founded by billionaire Michael Novogratz, is expanding its lending business to new customer groups, according to TechFlow. The latest deal is a multimillion-dollar loan, with the collateral being a violin that once belonged to Russian Empress Catherine II. Galaxy will hold a tokenized version of the instrument, as well as the violin itself, in the form of a non-fungible token. The violin will be kept by a custodian in Hong Kong, and both parties will need to sign an agreement to take it away.
Galaxy Digital already offers loans through its trading and investment banking unit, Galaxy Global Markets. Violin loans represent an initial effort by the company to attract a different client base that is benefiting from the rise in cryptocurrency prices and the wealth that comes with it. The company's average loan book size in the first quarter was $664 million as of March 31, up 5% from three months earlier.
That may improve as assets representing physical objects begin to be issued on blockchains, said Thomas Cowan, vice president of tokenization at Galaxy. Tokenizing physical assets such as art or musical instruments "enables us to lend more to our customers than we could with more volatile assets like Bitcoin or Ethereum," Cowan said in an interview. "Today it's a violin, tomorrow it could be real estate."
