Compound Treasury reportedly revealed an update where accredited institutions are able to borrow USD or USDC with fixed rates starting from 6% APR, using BTC, ETH, and supported ERC-20 assets as collateral. 

Specifically, the DeFi-backed Compound Treasury – a cash management solution for institutions operated by the Compound Protocol with notable customers include crypto firms, fintech institutions and banks – reportedly disclosed that the initiative was carried out as a response to recent market volatility, which resulted in a rise in robust demand for liquidity.

“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.” Reid Cuming, vice president of Compound Treasury, additionally remarked. 

“Introducing borrowing expands our cash management product to meet more needs of our clients.”

Via an official statement, the firm revealed that borrowing for customers will stay flexible, with “an open-ended term” and “no repayment schedule,” hence so long as participating clients remain overcollateralized. 

Collateral offered by borrowing institutions is not expected to leave Compound Treasury’s control, thereby offering an enhanced level of transparency and safety of funds.

Compound Treasury’s clients and the Compound Protocol will take care of liquidity for the program , which at the moment has more than $3 billion in assets and has obtained over $285 billion in overall transaction volume since the company began operating.

This announcement by Compound Treasury reportedly surfaced following the firm receiving a B- credit rating from S&P Global in May this year, helping the firm become a pioneer to receive a credit rating from a high-profile agency.