Silvergate Bank to Release Fiat Loans
Silvergate Bank, the United States established cryptocurrency lender, has revealed that they’re getting more involved with digital currencies. The company is planning on providing professional clients with fiat loans, taking cryptocurrency as collateral. The bank completed their S1/A Form and submitted it to the United States Securities & Exchange Commission on August 15th. This upcoming lending service is slated to be launched on the Silvergate Exchange Network. This is a prior payment system maintained by the company for crypto exchanges in the United States.
Silvergate Bank’s official statement reads: “This solution provides greater capital efficiency for institutional clients that wish to transact without needing to move liquidity on and off different exchanges. Offering lines of credit would also improve liquidity within the order book of our exchange clients. This enables additional trading on their platforms, potentially reducing pricing arbitrage across exchanges and improving the stability of digital currencies.”
Silvergate is one of the few banks operating in the United States that caters to cryptocurrency-related companies such as Bitstamp, Coinbase, Polychain Capital, Blocktower Capital and Xapo. These upcoming loans will be funded through their balance sheet, with the capability to sell the fiat digital currency to institutional clients.
Silvergate Returning to Power
Silvergate has noted that the bank has had a dramatic rise in client registrations for their crypto service. In the eight months of 2019, the exchange has seen an additional one hundred clients sign up with Silvergate Exchange Network. They now have 655 clients, compared to the 542 clients they had by the end of 2018. Additionally, the bank is also processing 288 new registrations from the Securities and Exchange Commission.
This news came after a horrendous fiscal year for Silvergate back in 2018. Their revenues dropped drastically, as did their activity amongst professional clients. These recent filings with SEC indicate that the bank is well on their way to return to profitability. The bank earned only $8 Million by the end of August in 2018, but by 2019 they’ve made $14.7 Million. Furthermore, the bank has seen $12.7 Billion worth of crypto trades occurring on their exchange network.
The bank finished their statements with, “We believe there may be attractive opportunities to provide digital currency facilities. That’ll deepen our high-quality customer relationships and further enhance our interest income.”