Bitcoin (BTC) mining company Riot Platforms (RIOT) has signed a $100 million loan agreement with Coinbase's lending arm, using bitcoin as collateral to secure short-term funding for its continued growth.

The publicly traded mining company said in a press release that it plans to use the loan within the next two months. The agreement provides Riot, which currently holds 19,223 BTC worth over $1.8 billion, with a line of credit that allows it to avoid issuing new shares.

“This credit facility represents an important element of our efforts to diversify our funding sources to support our operations and strategic growth initiatives to create long-term shareholder value,” said CEO Jason Les.

The loan issued by Coinbase Credit has a variable interest rate: borrowers will be required to pay at least 7.75% interest per annum, which is calculated as the greater of 3.25% or the federal funds rate cap plus 4.5%. The loan term is 364 days, although Riot can request a one-year extension if Coinbase agrees to it.

The credit line is secured by a portion of Riot's total bitcoin reserves. The firm said it intends to use the funds “to pursue key strategic initiatives and overall corporate goals.”

Coinbase has also made other similar deals. Last week, medical technology company Semler Scientific (SMLR) announced it had reached an agreement with Coinbase to borrow cash through a loan secured by its bitcoin.

Hut 8 (HUT), another Bitcoin miner, has also used a Bitcoin-backed line of credit from Coinbase in the past.

Source: cryptonews.net