A classical musical instrument secures a loan of several million dollars, as RWAs expand the boundaries of crypto finance
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A classical musical instrument secures a loan of several million dollars, as RWAs expand the boundaries of crypto finance
Yat Siu used a 316-year-old violin as collateral to borrow several million dollars from Galaxy.
Navigating Web3 tides with focused insightsBy Sonali Basak, Bloomberg
Translation: Luffy, Foresight News
Galaxy Digital Holdings LP, the firm founded by billionaire Michael Novogratz, is expanding its lending business into new client segments. Its latest deal involves a multimillion-dollar loan secured by a violin once owned by Russian Empress Catherine the Great.
According to Galaxy and Yat Siu, co-founder of Animoca Brands, the funds were lent to Siu, who acquired the 1708 Stradivarius violin at an auction last year for an estimated price of over $9 million.
Galaxy will hold both a tokenized version of the instrument on the blockchain and the physical violin itself. Galaxy and Siu declined to comment on specific terms or the exact loan amount, only disclosing it was “in the millions.” The violin will be held in custody in Hong Kong, and any removal requires joint authorization from both parties.
Galaxy Digital tokenizes a 316-year-old violin
Tokenization refers to the process of representing traditional assets—such as stocks, bonds, or artworks—with digital tokens on a blockchain.
Galaxy Digital has been offering loans through its trading and investment banking arm, Galaxy Global Markets. The violin loan marks the company’s initial effort to attract a broader range of clients benefiting from rising cryptocurrency prices and the resulting wealth surge.
According to Galaxy’s financial reports, the average book value of its loan portfolio reached $664 million in the first quarter ended March 31, up 5% from three months earlier.
Loans tied to crypto assets typically require substantial collateral due to volatile asset prices. Thomas Cowan, Vice President of Galaxy’s tokenization business, said this could improve as more real-world assets are issued on blockchains.
Next Stop: Real Estate?
“Tokenizing physical assets like art or instruments allows us to lend more than we would against highly volatile assets like Bitcoin or Ethereum,” Cowan said in an interview. “Today it’s a violin, tomorrow it could be real estate.”
Siu said he may use the loan proceeds to invest in new crypto-related ventures or artworks.
“I’m thinking about how we can create something unique that more people can access,” Siu said regarding the tokenization process. On the violin-backed loan, he added: “It’s also a good way to gain additional liquidity, even if it’s not necessary.”
Galaxy partnered with Siu through its subsidiary GK8 to tokenize the violin.
Siu said he eventually hopes to allow others to buy fractional ownership of the tokenized violin, though he added there are currently no plans to do so.
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