MAJOR CRYPTO PLATFORM ACCEPTS NFTs AS COLLATERAL

Genesis Digital Assets, the world’s biggest trading platform for professional crypto traders, according to the Financial Times, now accepts NFTs as collateral for loans and derivative transactions, the company has announced. 
Genesis will allow traders to pledge NFTs to back a deal in the same way that someone taking a loan would pledge a government bond or block of stock. 
The difference is that, unlike stocks and bonds, NFTs’ value is determined by nothing other than collectors’ whims and fancies. 
However, Genesis is taking “a very conservative approach” and accepts only “blue chip” NFTs, Joshua Lim, the country’s chief of derivatives, told the FT. 
The market for NFTs, or unique digital collectibles, swelled to $40 billion last year, the FT reported, with sports-themed NFTs expected to do $2 billion worth of business this year.  
Art, fashion, and wine brands are cashing in, creating their own array of NFTs. 
From June 2019 through June 2021, the market for NFT-based derivatives multiplied by 700 percent, with $3.2 trillion worth traded in that month last year, according to data service CryptoCompare.   
The value of derivative trades outpaced that of cash deals, accounting for more than half of all digital assets traded during the period, according to CryptoCompare.  
The derivatives market has been especially attractive to banks and other financial institutions, which regulations bar from trading in crypto cash markets.  
Clamor for the derivatives has persuaded the International Swaps and Derivatives Association to begin formulating a framework for products based on digital assets.