A Virginia pension fund has just received approval to invest in crypto “yield farming” despite huge losses in space

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• According to the Financial Times, a Virginia pension fund has received approval to invest in crypto lending to boost portfolio returns.

• The Fairfax County fund will allocate capital to crypto yield farming despite the sector’s price decline this year.

• Yield farming involves staking cryptos for a set period of time against interest payments.

A Virginia pension fund with $6.8 billion in assets under management has received approval from its board of trustees to allocate funds to cryptocurrency yield cultivation, according to a Financial Times report on Friday.

Fairfax County Retirement Systems first announced plans to study yield farming in May. The fund consists of the Fairfax County Employee Pension Scheme and the Fairfax County Police Officer Pension Scheme.

Crypto yield farming involves lending tokens in exchange for interest payments. The further move into crypto lending for the pension fund comes as the sector has collapsed this year, particularly with the fall of stablecoin Terra USD, which has been a popular vehicle for investor staking.

The Fairfax Fund has previously invested in crypto, with an initial combined allocation of $21 million between employee and police pensions for the Morgan Creek Blockchain Opportunities Fund in 2019. Katherine Molnar, Fairfax County Police Chief Investment Officer Officers Retirement System told the Financial Times that it’s timely investments “that you can get in a yield farming strategy is really attractive because some of the people have pulled out of this space.”

The collapse in crypto lending has spread to large corporations this year, with companies like Three Arrows Capital and Celsius Network going bankrupt thanks to heavy losses from investors using their tokens.

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