Galaxy Digital, led by Michael Novogratz, and Animoca Brands co-founder Yat Siu converted a 1708 Stradivarius violin into a non-fungible token (NFT) and used it as collateral for a loan.
It was reported on June 4 that Galaxy Digital provided a multimillion-dollar loan to Siu, who offered his 316-year-old Stradivarius violin as collateral.
The historic instrument was tokenized, and both the NFT and the physical violin will remain with Galaxy Digital until the loan is repaid. The actual violin will be stored with a Hong Kong-based custodian until Galaxy Digital and Siu authorize its release.
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This violin has a rich history, as documented by the auction house Tarisio. It was initially acquired by the Russian ambassador to Venice for Empress Elisabeth Petrovna, who ruled the Russian Empire from 1741 to 1762. After her death, the violin was inherited by Catherine II, also known as Catherine the Great.
Yat Siu purchased the violin for more than $9 million at an auction in 2023.
Thomas Cowan, vice president of tokenization at Galaxy, highlighted that the potential to tokenize physical assets could significantly change crypto lending. He noted that because digital assets are volatile, the collateral requirements are typically high. However, they can offer larger loans by tokenizing physical assets like this violin.
Using the historic Stradivarius violin as collateral for a loan highlights the adaptability of NFTs and suggests a future where more physical assets are incorporated into the crypto economy.
In other news, soccer star Cristiano Ronaldo has recently released his fourth collection of NFTs, showcasing the key moments from his career.
