Tue, June 18, 2024

Silvergate Bank Plans to Offer New Services

U.S. bank and crypto-related companies

Silvergate bank became famous thanks to its position regarding the cryptocurrencies. It provides U.S. dollar banking services for businesses that would like to use cryptocurrency. This is a very important decision as many banks refuse to handle the crypto transactions.

Moreover, this bank from the U.S. State of California plans to make another serious decision. It wants to handle digital assets directly. Silvergate bank applied for the New York trust license. This would allow the bank to provide custody and settlement for crypto.

For example, the bank will provide settlement services for the bitcoin trades. Silvergate would serve as an intermediary ensuring settlement of a fiat-for-Bitcoin exchange between two participants on the Silvegate Exchange Network (SEN). This is a payment platform that allows commercial customers to move U.S. dollars between crypto exchanges in no time all.

CEO of Silvergate Alan J. Lane discussed this topic. According to Lane, it is essential for them to handle digital assets. This is the best way to gain trust from the customers.

This service has the chance to become the first of its kind offered by a U.S. commercial bank. It is important to mention that this service is not for the retail investors or institutional investors as they are already used to Bitcoin as an asset class.

The overview of the Silvergate bankCrypto markets and U.S. banks

In terms of assets, Silvergate is a small bank. For example, its assets equal to 0.07% of JPMorgan. Moreover, most of the assets are composed of real estate loans.

However, the situation is changing as the bank wants to focus on SEN Leverage products. This product would allow proprietary traders to use Bitcoin as collateral for fiat loans. Traders can use this loan to buy more Bitcoin.

Silvergate bank is also working to increase the number of fiat currencies; it supports foreign exchange transactions. According to the information, it plans to include at least the top five to 10 major global currencies.

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