- Gemini secures $75M from Ripple as Nasdaq IPO plans intensify.
- Ripple’s RLUSD stablecoin to play key role in Gemini’s future.
- Gemini adds XRP, SHIB, DOGE for expanded collateral options.
Gemini, the cryptocurrency exchange led by the Winklevoss twins, has secured a $75 million credit line from Ripple Labs, as disclosed in the exchange’s S-1 filing with the SEC. This lifeline comes at a pivotal moment for Gemini, which is grappling with significant financial losses while preparing for its Nasdaq IPO.
Under the terms of the deal, Gemini can borrow in increments of at least $5 million, with interest rates reaching up to 8.5% annually. The cap on the first borrowing is fixed at $75 million, but this may increase to $150 million if certain conditions are attained.
The initial borrowings will be denominated in US dollars, but in the future, draws can include the Ripple RLUSD stablecoin, which will be launched in December 2024.
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Ripple’s Strategic Role
The credit line from Ripple provides Gemini with essential financial support as it faces substantial losses, nearly $282 million in the first half of 2025. The exchange also reported liabilities exceeding $2 billion, with cash reserves dwindling to just $162 million by mid-year.
Nevertheless, Gemini is continuing with its intention to list on Nasdaq under the ticker symbol GEMI, with Goldman and Citigroup spearheading the offering.
This collaboration can assist Gemini in relieving its financial burden and is also a strategic move to push Ripple RLUSD. Future borrowing using Ripple stablecoin would widen its market adoption to the advantage of both parties.
Gemini Expands Cross-Collateral Features
In addition to securing funding, Gemini has broadened its collateral offerings by including XRP, alongside other digital assets such as Shiba Inu (SHIB), Dogecoin (DOGE), Solana (SOL), and Bitcoin Cash (BCH). Previously, only Bitcoin (BTC) was accepted as collateral for derivatives trading.
This alteration allows users to diversify their collateral pool by pooling several cryptocurrencies. For example, an investor with 1,000 DOGE, 1 SOL, and 10 XRP (approximately worth $440) can now utilize this to collateralize leveraged trades.
Nevertheless, the volatility of assets like XRP poses extra risks, as changes in prices may result in liquidation in unfavorable market conditions.
As much as this increase has brought flexibility to traders, it is a risk that demands to be taken seriously. Gemini recommends users spread their collateral to prevent overleveraging and reduce the chances of making huge losses in times of market volatility.
This move signifies a shift in Gemini’s approach to derivatives trading, providing greater opportunities for users but also demanding more attention to risk management.
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