It's been a long journey for Alan Lane since the Silvergate Bank CEO bought his first bitcoin in 2013.
"Here were these companies that were raising money from reputable firms. They weren't doing anything illegal, they weren't doing anything immoral. And yet, they were struggling to maintain bank accounts. So I put our need for deposits together with their need for banking services."
Five years later, Silvergate is arguably the leading bank for crypto startups in the U.S. Prominent exchange clients include Coinbase, Gemini, Kraken, and bitFlyer.
As revealed in the bank's initial public offering prospectus, filed earlier this month, the bank now works with 483 crypto startups that contributed roughly $1.7 billion in deposits to the balance sheet as of Q3 2018.
To overcome the crypto-phobia that to this day has held back most of Silvergate's peers from serving the sector, Silvergate invited exchange executives to meet directly with the bank's regulators, Lane said during a panel discussion on banking bitcoin startups.
At the time, most crypto startups in those days had executives juggling diverse responsibilities, which was not going to cut it for a bank or its regulators.
During the same panel, Nick Rosenberg, director of IT at the Metropolitan Bank in New York, said his institution - one of the very few to compete with Silvergate in the space - is aggressively pursuing a diverse range of crypto startups.
"Coinbase is probably the most well-banked company in the ecosystem. Coinbase probably banks with us and every other bank doing this on purpose."
To distinguish itself from a client's other banks, Silvergate integrates with exchange platforms' APIs so that institutional investors with Silvergate accounts can instantly make trades or deposits 24/7, even if the bank is closed.
Although Lane said he originally scoffed at the phenomenon of cryptocurrencies designed to hold their value with fiat, his bank is now "Looking into stablecoins" to learn more.
How Silvergate Became the Leading Bank for Crypto Startups
Publicado en Dec 1, 2018
by Coindesk | Publicado en Coinage
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