A former Goldman Sachs executive is aiming to connect the $12 trillion repo market with the burgeoning cryptocurrency sector.

Alex Grebnev launched 'Oxygen' this week - a blockchain-based peer-to-peer marketplace for borrowing and lending cryptoassets.

The system is built on Ethereum, the popular cryptocurrency and blockchain system based on the use of tokens which can be bought, sold, or traded.

Oxygen will allow token holders to generate income from lending, raise liquidity against crypto collateral and borrow crypto assets to go short.

London-based Grebnev's background is in equities trading solutions. He worked at Merrill Lynch between 2006-2010 and Goldman Sachs from 2001-2010.

"Oxygen will breathe new life into cryptocurrency portfolios by helping owners to generate income, enhance yield, take directional views, and hedge," the firm wrote in marketing material seen by Global Investor.

At the outset, Oxygen will work with Ethereum and ERC20 tokens, the market standard for Initial Coin Offerings (ICOs).

The 'smart contract' at the heart of Oxygen is based on the Global Master Repurchase Agreement (GMRA) - a legal agreement designed for parties transacting repos.

Eventually the platform plans to accept to bitcoin, litecoin and other blockchain-based cryptocurrencies.

It also plans to be regulated under the new distributed ledger technology regime in Gibraltar and will apply to to register as an Alternative Trading System (ATS) in the US.

"It’s definitely interesting to see the model build around the GMRA, which of course underpins the real world global repo market," Andy Hill, a senior director at the International Capital Market Association (ICMA), told Global Investor.

Hill added: "Crypto currencies certainly lend themselves to repo from the perspective that they are fungible and easily valued. I think the most exciting thing about this, however, is the use of ‘smart contracts’ which effectively disintermediates custodians, clearers, and settlement systems. It doesn’t seem unreasonable that at some point in the near future this is where we will end up for more traditional financial markets such as FX and bonds."

Oxygen's launch comes as another platform, Lendingblock, is set to go live this summer allowing holders of digital assets to lend them to those who want to borrow in the short term.

The loans will be collateralised by cryptoassets and administered using smart contracts.