Federal Reserve member Silvergate Bank reaps rewards with a new record in crypto deposits after the risks it took as one of the first banks that let Bitcoin firms open bank accounts.
According to an earnings call released on October 26, 2020, US$586 million worth of crypto deposits was logged in the third quarter of 2020. This brings the total crypto assets of the La Jolla, California-based bank to US$2.1 billion as of September 30, 2020.
This record is a huge increase compared to the US$1.5 billion it took as of June 30, 2020. It was not since the record quarter of Q4 2017 when the bank reached such heights after taking in a tally of US$835 million in crypto business.
Moreover, this quarter showed that 928 digital currency customers made US$3.3 million in revenue for the bank as opposed to US$2.4 million for the Q2 of 2020 and US$1.6 million for the Q3 of 2019. Be that as it may, the bank does not have physical custody of the assets.
After the regulative change that allows banks to have custody of stablecoins and other virtual assets, the cryptocurrency news reveals a steady rise of interest in blockchain-based assets.
‘The Bank’s infrastructure has provided Silvergate with the foundation to succeed in what has become a very digital world and we see an ample runway for further growth given the numerous opportunities to expand’, Silvergate CEO Alan Lane shared in an interview.
In addition, the bank offers a centralized service called Silvergate Exchange Network (SEN). It allows customers to make rapid purchases needed to arbitrage the crypto market. A total of US$35.5 million lines of credit was approved by the bank during the pilot tests of SEN.
‘While the Fed’s zero interest rate policy will be a headwind for many, Silvergate has an exciting growth engine in the SEN’, Lane also said. ‘We believe that as more fintech firms and corporate treasuries announce their investments in bitcoin, the ecosystem as a whole will continue to expand’.
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