Banks do not necessarily have to be crypto-hostile. On the contrary, more and more banks are seeing the positive implications of blockchain technology, including for the tokenization of assets. This includes the Californian Silvergate Bank. According to a report on the Xconomy news site, the bank is planning a US$ 50 million IPO. Silvergate intends to use the capital increase to expand its services for customers in the crypto ecosystem.
Californian bank Silvergate is rapidly transforming itself from a traditional credit institution into a global pioneer in the institutional management of crypto assets. Although the official SEC application for the IPO does not provide any details on the exact use of the new capital, Silvergate only talks about investments in “organic growth and basic corporate purposes”. In view of the bank’s explicit crypto affinity, however, an expansion of crypto services is more than likely.
Silvergate has been in the middle of the Bitcoin revolution sector since 2013
As Xconomy reports, CEO Alan Lane contracted the Bitcoin revolution virus at the time and has kept the bank on course ever since. In 2014 Silvergate was able to win the Digital Currency Group (DCG), an important holding company from the crypto ecosystem. DCG invests in crypto start-ups and holds shares in the news site CoinDesk. The fact that the bank has been focusing on customers from the crypto ecosystem for so long gives it an enormous competitive advantage:
“Our ability to define these markets as a target group over the last five years provides us with an enormous first mover advantage in the area of digital currencies. Crypto currencies have therefore become the cornerstone of our business”.
Financial infrastructure increasingly important for Bitcoin loophole
Obviously, the bank has hit a nerve with its focus on companies from the Bitcoin loophole crypto sector, because despite the bear market, the number of its customers is growing rapidly. Read more about it: Is Bitcoin Loophole a Scam? Read This Review Before You Sign Up! Silvergate has a total of 483 customers (as of 30 September) in its crypto sector. Compared to the previous year, the bank recorded an increase of 323 per cent in this area. This is stated in the IPO document. All crypto customers together deposited approximately USD 1.7 billion with Silvergate.
Silvergate’s core business differs from traditionally oriented financial service providers in that it does not focus on traditional lending. Instead, the bank concentrates on the deposit of non-interest-bearing investments, which it then invests with other financial institutions.
The majority of traditional credit institutions are passive to hostile to crypto-space, to say the least. Meanwhile, however, more and more institutions are seeking to escape to the front.
The most important example in this country is probably Bitwala. As reported by BTC-ECHO, Bitwala will probably open Germany’s first BaFin-compliant blockchain account in November.