Silvergate Bank Wants To ‘Touch’ BTC In The Most Innovative Way

Today’s Bitcoin news and updates show that the La Jolia-based lender known as Silvergate Bank wants to enter a new field and handle digital assets themselves. Unlike other banks which deal in cryptocurrency, this one wants to handle assets directly.

Even though there is no roadmap for this yet, Silvergate Bank wants it and applied for the New York Trust license recently with the main aim of providing custody and settlement for crypto. An example of this might look like “providing settlement services for their bitcoin trades,” as the Silvergate CEO Alan J. Lane said.

In this scenario, we can see that Silvergate would be the intermediary which is ensuring fine settlement of a fiat-for-Bitcoin exchange between two participants on its Silvergate Exchange Network (SEN) – the payments platform which allows commercial customers to instantly move USD between crypto exchanges.

“In order for us to be able to be that trusted intermediary, we have to be able to touch the digital assets ourselves,” Lane added. “Think about it as if Silvergate also had the ability to be the SEN for bitcoin.”

This service is dubbed as the first of its kind offered by a US commercial bank. Silvergate Bank wants to be a true innovator and as Lane said:

“It’s folks that aren’t quite ready to be in the business, and part of the reason is because this doesn’t exist. Our current customers, they’ve already figured out a way to get comfortable with this, but they tell us there are other counter parties out there that they’re not yet doing business with because they don’t have a trusted way to settle.”

Silvergate Bank wants to alter its 2020 roadmap by getting its Bitcoin-collaterized margin lending running well and solving other pain points in the digital asset industry as the CEO noted.

With $2.1 billion in assets, Silvergate is still a relatively small institution and is 0.07% the size of JPMorgan. However, its biggest focus now is crypto and the SEN Leverage product which allows proprietary traders to put up Bitcoin as collateral for fiat loans that they can use to buy more Bitcoin.

“We will be able to monitor the loan, the collateral underlying the loan and the balance of the loan, 24 hours a day, seven days a week,” Lane said. “We’ll be able to monitor this much more closely than we can monitor just about any other loan we make.”