Silvergate bank is the leading financial institute for the cryptocurrency startups in the United States. Based in La Jolla, California, it was a small bank that took the plunge to start crypto exchange back in the year 2013. It’s CEO Alan Lane says that they took this decision by analysing the need for deposits for its bank and the requirement of a legit financial institute for Cryptocurrency startups. From its first transaction of Bitcoin as an exchange, Silvergate Bank has come a long way. It is working with approximately 483 startups of crypto with a contribution of $1.7 billion to its deposits as shown in Q3 report of 2019.
Recently, the parent company of Silvergate Bank, Silvergate Capital Corporation has intimated of its plans to provide loans with cryptocurrency collaterals.
According to the S1/A form the firm filed on 15th August with the U.S. Securities & Exchange Commission, the banknotes read:-
“We believe there may be attractive opportunities to provide digital currency borrowing facilities to deepen our high-quality customer relationships and further enhance our interest income.”
The document mentions that a significant increase in demand for borrowing against cryptocurrencies. The firm plans to offer services that consists of U.S. Dollars and/or crypto assets as collateral by clients in exchange for a higher credit amount.
Silvergate Bank is looking to “set a conservative aggregate lending amount to refine the product, and will develop a risk framework to minimize risk and further develop lending models over time.”
Silvergate Bank is looking to offer these crypto-related credits as soon as the end of this year. It will be available to institutional clients. The bank has also found that its customers anticipating for it to be involved in the transfer and custody of digital assets between customers.
Silvergate Bank’s annual revenue is estimated to be $30 million as per Owler.
As per the March report by Cointelegraph, the bank has signed on taken on a number of new cryptocurrency customers. These include cryptocurrency miners and exchanges, global investors and custodians and more in Q4 of 2018.
In the year 2018, the deposits of the bank that were derived from cryptocurrency customers saw an increment of 11.4% i.e. $150.4 million.
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