While there are a growing number of banks worldwide that are now accepting and allowing cryptocurrency transactions, the number dwindles when it comes to crypto business friendly accounts. Particularly in the United States. However, there are three FDIC insured US banks that stand out when it comes to commercial crypto accounts.
SILVERGATE BANK
The concept of currency dates back to the dawn of civilization. Over the centuries, everything from salt to dolphin teeth has been assigned value for the purpose of buying and selling goods and services. Gold and silver might hold the record for most-widely-accepted currency, but metals were eventually deemed impractical for everyday use. Enter paper bills, which became the legal tender of choice until credit cards were introduced in 1950.
For the next 60 years, the methods of exchanging funds became more advanced as new technology was introduced, but there were no fundamental changes to the underlying financial infrastructure. Governments produced and regulated currencies, and centralized banks served as intermediaries for currency transfers. There were no realistic alternatives to the global financial system.
In 2009, something remarkable happened. The mysterious Satoshi Nakamoto, who has never been definitively unmasked, created a new store of value: bitcoin. Bitcoin is a cryptocurrency that is managed through blockchain technology – no government or financial system involvement required. It’s an opportunity for individuals to exchange funds on a peer-to-peer basis rather than relying on an intermediary.
The concept was dismissed as a fad or a foolish experiment for years, but soon the trickle of Bitcoin users became a flood. Bitcoin increased more than 13,000 percent in value, and thousands of additional cryptocurrencies were introduced.
Just a handful of these new additions took off – for example, Ethereum (ETH), Litecoin (LTC), Cardano (ADA), Dogecoin (DOGE), and Tether (USDT) – but as a group, they established the legitimacy of the cryptocurrency concept. In recent years, cryptocurrency ATMs have been made available, and businesses have started accepting select cryptocurrencies as payment.
In a particularly extraordinary move, the country of El Salvador made Bitcoin legal tender. The cryptocurrency market peaked soon after El Salvador’s law went into effect. In November 2021, it was valued at nearly $3 trillion.
As cryptocurrency gained widespread acceptance, a number of supporting industries grew up around it. Trading platforms were developed to buy and sell cryptocurrency, and entire companies were created or repurposed to develop better technology and infrastructure to support digital currency.
Silvergate Capital, parent to Silvergate Bank, is one such company. In 1988, it was founded as a traditional bank, and it was one of the very first in the industry to embrace cryptocurrency. Now Silvergate is ready to launch its own digital currency, a “stablecoin”, based on technology that originated with the exceptionally talented software engineers of Meta (formerly Facebook).
Silvergate started public trading in November 2019, and its stock has since gained more than 800 percent as of early February 2022. So, what exactly does Silvergate do, and what’s next for them in cryptocurrency exchange infrastructure?
Silvergate Crypto Bank
Silvergate Capital is, at its core, a holding company for Silvergate Bank. While the bank offers traditional financial services, it is best known for its early adoption of cryptocurrency. Back in 2013, when naysayers were still convinced that the concept would stay on the fringe of the financial world, Silvergate began actively pursuing digital currency clients. Today, it serves more than 1,300 cryptocurrency and fintech clients, including some of the largest names in the global digital currency industry.
Among other products and services that set Silvergate apart from competitors in the traditional and digital financial industry, Silvergate accepts Bitcoin as collateral for loans when those loans are made to large corporate clients like Block (formerly Square), Coinbase, and PayPal.
Silvergate is largely focused on disruptive innovation, and it is leading the way when it comes to developing the infrastructure and technology required for cryptocurrency exchange. It operates the Silvergate Exchange Network (SEN), which gives account holders the ability to trade with each other around the clock. That’s critical for the large crypto trading platforms that rely on SEN, such as Gemini and Coinbase.
One of the most interesting developments in Silvergate’s strategic plan was its decision to acquire the assets and intellectual property of Meta’s (formerly Facebook) Diem Group. Diem was originally charged with developing a stablecoin for Meta, and Silvergate was heavily involved in the project.
Like other cryptocurrencies, stablecoin is all-digital. However, unlike Bitcoin and similar cryptocurrencies, stablecoin is far less volatile. Its value is tied to an underlying asset, for example, the US dollar, making it far more appealing to the risk-averse.
Silvergate intends to introduce its stablecoin by the end of the year. Though these digital assets are primarily used for trading crypto right now, Silvergate’s long-term plan is to expand opportunities to use stablecoin in everyday transactions. If successful, Silvergate will be one of the first to bring its stablecoin to market, increasing the likelihood of becoming the market leader.
Silvergate’s primary sources of revenue include returns on loans and other investments made with client deposits. As deposits continue to grow, Silvergate’s ability to generate revenue will grow, too. The company also earns revenue through transaction fees associated with the digital currency exchange. More clients and increased transaction volume will continue to push fee revenue up.
Traditional banks have dipped their toes into the crypto waters, but most are still staying out of the digital currency market. However, there are a handful of banks that have made crypto a priority – Signature Bank, for example – and it is possible that they could pose a threat to Silvergate in the future with enough resources or a smart acquisition.
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BANKPROV
BankProv offers full-service USD banking products for crypto native and related businesses. They are a full-service commercial blockchain bank.
Services include:
- 100% full-insured USD depots.
- Crypto backed lending options.
- Full API banking suite.
- Range of payment solutions.
The API banking suite allows the customer to communicate between the bank core and the customer’s platforms to streamline operations, manage finances and simplify sending and receiving money. There is a full range of business checking products including domestic and international wires and ACH.
In March 2022 BankProv partnered with Rocketplace, a California-based cryptocurrency exchange, to provide Banking-as-a-Service infrastructure and crypto-friendly banking solutions for its latest digital asset platform.
Through this partnership, Rocketplace will utilize BankProv’s innovative Banking-as-a-Service (BaaS) offering to support its need for access to core banking services, including white-labeled deposit products and payment rails. BankProv will power On and Off-Ramps to bridge the gateway from fiat (USD)-crypto, allowing Rocketplace users to quickly deposit, trade, and withdraw funds. Together, they are combining the benefits of Rocketplace’s 24/7, commission-free cryptocurrency exchange with traditional banking features to deliver a seamless investment management experience.
Rocketplace will integrate BankProv’s deposit and payment services directly into its digital asset trading platform and utilize Modern Treasury, a payment operations platform driving faster, more efficient payments and reconciliation.
“Digitally native consumers are demonstrating a clear preference for services that offer speed and trust,” said Louis Beryl, CEO at Rocketplace. “By partnering with BankProv, Rocketplace is equipped to meet this consumer demand through instant deposits and fast, commission-free trading of their favorite cryptocurrencies.”
Bank Prov Crypto Lending Program
In December 2021, BankProv announced a crypto lending partnership with CrossTower, one of the world’s fastest and leading trading platforms and digital asset investment firms, to provide equipment financing for Bitcoin miners.
“CrossTower is very excited to partner with BankProv to develop a dynamic and sophisticated lending business in the cryptocurrency industry,” said Kristin Boggiano, co-founder and President at CrossTower. “CrossTower has an incredible global infrastructure that offers access by institutions to the digital asset markets. We are excited to expand our product offerings.”
Demand to borrow against crypto is currently at an all-time high. A 2020 Credmark report found the crypto lending industry has over $40 billion in locked value.
BankProv is teaming up with CrossTower to support the industry’s need for USD funding to scale mining operations. Equipment loans will be financed through BankProv’s expanding Specialty Lending team and supported by CrossTower’s world class collateral management technology and underwriting standards. This offering is expected to help miners looking to invest in some of the most advanced mining equipment on the market, with the repayment of the loan coming from the cryptocurrency mined from the very rigs financed by BankProv.
“BankProv is proud to expand its relationship with CrossTower to include this new and exciting specialty lending initiative,” said Dave Mansfield, CEO of BankProv. “By partnering with an innovative, longstanding and trusted partner like CrossTower, we’re able to execute on our mission to provide much-needed banking services to an underserved market and increase the widespread adoption of this asset class.”
Institutional focus, Symbridge Partnership
In January 2022 BankProv announced their partnership with Symbridge, a digital asset exchange designed specifically with an institutional focus.
Symbridge is fully integrated with ProvXchange’s API, completing its first send through the network with an institutional counterparty.
“We are delighted to partner with BankProv to enhance our user’s experience,” said Alexander Kravets, CEO of Symbridge. “Through this partnership, our client base of institutions and accredited investors will integrate well with the Bank’s specialty offerings, and we feel they will benefit from BankProv’s industry-leading API functionality. This strong partnership is a natural fit for us, helping us to continue to grow.”
ProvXchange enables BankProv clients to transfer between their accounts and the accounts of other BankProv clients in real-time without the delays of traditional payment rails. Using the Bank’s APIs, clients can also get up-to-date, accurate information on their accounts to effectively maintain receivable and payables, and easily maximize business productivity.
“We are excited to announce Symbridge has joined our ProvXchange network,” said Dave Mansfield, CEO of BankProv. “We built the ProvXchange network to better meet the needs of this community and we look forward to supporting Symbridge’s growth,” he said.
Greenwich, Connecticut-based Symbridge is ushering in a new era of finance. Focused on meeting the needs of institutional and accredited investors, Symbridge’s trading solutions and ecosystem provide access to a wide range of digital assets. Symbridge seeks to provide investors with secure, reliable, and transparent platform, enabling them to trade quickly and with confidence. For more information, please visit symbridge.com.
Banking Infrastructure, Rocketplace Partnership
In March 2022 BankProv announced its partnership with Rocketplace, a California-based cryptocurrency exchange, to provide Banking-as-a-Service infrastructure and crypto-friendly banking solutions for its latest digital asset platform.
Through this partnership, Rocketplace will utilize BankProv’s innovative Banking-as-a-Service (BaaS) offering to support its need for access to core banking services, including white-labeled deposit products and payment rails. BankProv will power On and Off-Ramps to bridge the gateway from fiat (USD)-crypto, allowing Rocketplace users to quickly deposit, trade, and withdraw funds. Together, they are combining the benefits of Rocketplace’s 24/7, commission-free cryptocurrency exchange with traditional banking features to deliver a seamless investment management experience.
Rocketplace will integrate BankProv’s deposit and payment services directly into its digital asset trading platform and utilize Modern Treasury, a payment operations platform driving faster, more efficient payments and reconciliation.
“Digitally native consumers are demonstrating a clear preference for services that offer speed and trust,” said Louis Beryl, CEO at Rocketplace. “By partnering with BankProv, Rocketplace is equipped to meet this consumer demand through instant deposits and fast, commission-free trading of their favorite cryptocurrencies.”
Whether you’re a first-time trader or a seasoned pro, Rocketplace takes the guesswork out of buying and selling cryptocurrency while making it easy to buy, sell, and trade Bitcoin and cryptocurrency 24/7 from one single profile. Founded by Louis Beryl and Benjamin Hutchinson, Rocketplace believes that cryptocurrencies are an asset class that should be approachable to all investors. The platform takes a “learn while you earn” approach by offering regular research and articles to help their users navigate the industry so users can toggle less and invest smarter.
“Rocketplace’s commission-free trading will change the game for digital asset platforms” said Dave Mansfield, CEO of BankProv. “This partnership is one of the first in the industry to support a crypto-related business with banking-as-a-service solutions – further solidifying our mission to provide much-needed banking services to the industry.”
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SIGNATURE BANK
Signature Bank was the first FDIC-insured bank to launch a blockchain-based digital payments platform, Signet™.
Signet™ allows commercial clients to make real-time payments in U.S. dollars, 24/7/365 and was also the first solution to be approved for use by the NYS Department of Financial Services.
Signet Launched On Fireblocks Network
On June 23, 2020, Signature Bank announced the launch and integration of the full functionality of its proprietary, blockchain-based digital payments platform, Signet™, with Fireblocks, an enterprise-grade platform delivering a secure infrastructure for moving, storing, and issuing digital assets.
Signature Bank is the first bank to enable its commercial clients to access the Signet blockchain-based, real-time payments platform through the Fireblocks Network.
Recently, Signature Bank enhanced the power and capabilities of Signet, a tokenized representation of USD to facilitate instant settlement, with the addition of Application Program Interface (API). The new Signet APIs allow the Bank’s clients and developers to directly integrate their proprietary systems with the Signet platform to access full transactional capabilities.
Signet APIs continue to enhance the real-time, 24/7/365 benefits and transactional security of the Signet platform. The introduction of Signet APIs increases Signature Bank’s clients’ abilities to immediately settle their transactions securely and enhances their capabilities when transacting with Signet.
This deep integration with Fireblocks affords Signature Bank clients greater capital efficiency and security during fiat and cryptocurrency settlements and payments. Effective immediately, Signature Bank clients can use Signet to initiate transactions on the Fireblocks Network via console and API connectivity.
“The integration with Fireblocks will offer enhanced services to our clients. With this latest banking technology innovation, Signature Bank remains at the forefront as we advance our Signet product and its capabilities. As the digital needs of our clients continue to evolve and the broader adoption of asset tokenization increases, Signet APIs are yet another example of how we continuously strive to help our clients deliver better business performance and improve their operations,” said Joseph DePaolo, President and Chief Executive Officer at Signature Bank.
“Fireblocks and Signature Bank share the same core philosophy when it comes to ensuring the accessibility and security of customer assets 24/7/365. Naturally, Signature Bank is a vital partner for us as we continue to grow the Fireblocks Network,” said Michael Shaulov, Chief Executive Officer of Fireblocks.
Introduced January 1, 2019, Signet, the first platform of its kind to be approved for use by the New York State Department of Financial Services, enables instantaneous payments among Signature Bank clients. Now, with Signet APIs, the Bank’s clients can immediately settle their transactions securely and enhance their capabilities when transacting with Signet.
Fireblocks is an enterprise-grade platform delivering a secure infrastructure for moving, storing, and issuing digital assets. Fireblocks enables exchanges, custodians, banks, trading desks, and hedge funds to securely scale digital asset operations through the Fireblocks Network and MPC-based Wallet Infrastructure. They have secured the transfer of over $30 billion in digital assets and have a unique insurance policy that covers assets in storage & in transit. For more information, please visit www. fireblocks.com.
TrueUSD Partnership
June 18, 2021Signature Bank announced its partnership with TrueUSD.
This relationship enables Signature Bank to offer its clients access to TUSD, the first digital asset backed 1:1 with US dollars with live, on-chain Proof of Reserves, verified independently by a top US accounting firm.
TrueUSD provides its customers with the most trusted dollar-pegged asset by ensuring transparency amongst its partnerships with internationally renowned banks and auditing firms. To date, TUSD circulating supply stands at more than $1.4 billion in circulation, with billions of dollars in monthly transaction volume.
Signature Bank was the first FDIC-insured bank to launch a blockchain-based digital payments platform. Signet, an Ethereum-based payments platform, allows commercial clients the ability to make real-time payments in US dollars, 24/7/365.
Signet is also the first to be approved for use by the New York State Department of Financial Services. With Signet, Signature Bank clients also have access to 24/7/365 support, a service distinctive to the Bank.
“We welcome TrueUSD to our ever-growing eco-system. The relationship with TrueUSD enhances Signature Bank’s offering to its existing commercial clients. Through arrangements like this one, Signature Bank is further strengthening its position as one of the pre-imminent banks in the digital assets space,” said Joseph J. DePaolo, President and Chief Executive Officer at Signature Bank.
Jennifer Jiang, Chairperson of TrueUSD, commented: “TrueUSD was founded to bring trusted financial opportunities to the world. The integration into Signature Bank’s Signet platform is a monumental milestone for TUSD’s growth and adoption as an attested, dollar-backed digital currency. Our integration into Signet brings global TUSD customers another secure real-time settlement option.”
Rafael Cosman, CEO of TrustToken, makers of TUSD, added: “Our mission has always been to grow financial opportunities for all, and TUSD’s new partnership with Signature Bank does exactly that by putting the most transparent digital dollar in more hands, more quickly. Offering TUSD users a new way to instantly settle via Signet is a key step to grow TUSD’s accessibility, transparency, and utility.”
Signature Bank (Nasdaq: SBNY), member FDIC, is a New York-based, full-service commercial bank with 37 private client offices throughout the metropolitan New York area, as well as those in Connecticut, California and North Carolina. Through its single-point-of-contact approach, the Bank’s private client banking teams primarily serve the needs of privately owned businesses, their owners and senior managers.
The Bank has two wholly owned subsidiaries: Signature Financial, LLC, provides equipment finance and leasing; and, Signature Securities Group Corporation, a licensed broker-dealer, investment adviser and member FINRA/SIPC, offers investment, brokerage, asset management and insurance products and services.
Since commencing operations in May 2001, Signature Bank reached $118.45 billion in assets as of December 31, 2021. With $106.13 billion in deposits at year-end 2021, Signature Bank placed 19th on S&P Global’s list of the largest banks in the U.S., based on deposits.
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