Bullish, the institutionally focused digital asset exchange, announced Friday that it has extended a $100 million stablecoin debt facility to USD.AI to finance loans secured by graphics processing units (GPUs). The company also plans to list USD.AI's yield-bearing crypto asset sUSDai on its trading platform.
The facility targets the private credit market for AI capital expenditures, where businesses can borrow funds by using their GPUs as collateral. Bullish characterized this lending category as one of the largest in private credit, larger in scale than traditional debt markets such as auto loans and home equity lines of credit.
Real-World Assets Moving Onchain
Bullish was established in Hong Kong in 2020 by Block.one co-founder and CEO Brendan Blumer. Following Friday's announcement, the company's NYSE-listed shares declined 2% but showed a 10.5% gain over five days and have climbed more than 44% over the past month.
Thomas Cowan, Head of Tokenization at Bullish, stated that the deal reflects the company's belief that real-world assets should be connected to digital money systems. Cowan noted that USD.AI's onchain transparency enabled Bullish to apply institutional-level diligence to underwriting the facility.
GPU Collateral Risks
The arrangement carries risks inherent to using GPUs as loan collateral. GPU prices can fluctuate significantly, and the technology faces rapid obsolescence as newer processors are developed. The arrangement will face its most serious test if a borrower defaults on their loan.
