The US-based crypto-friendly lender is considering jumping into the digital assets business. The bank’s pipeline is planning to offer fiat loans to clients with crypto assets as their main collateral.
Silvergate is one of the industry’s top go to places, serving renown clients such as Bitstamp, Genesis Trading, Coinbase, Blocktower Capital and Xapo. The bank has seen a sudden increase in industry demands.
With its portfolio update, Silvergate Bank will allow institutional clients of crypto exchange platform to use their fiat assets without interfering their crypto balances on the trading venues.
“This solution provides greater capital efficiency for institutional investor 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, enabling additional trading on their platforms, potentially reducing pricing arbitrage across exchanges and improving the stability of digital currencies.”, quotes the IPO filing.
Crypto-backed loans will be funded from Silvergate’s own balance. The bank expressed beliefs that any risk will be “appropriately compensated,… earning attractive risk-adjusted returns.”
“Capitalize on our Unique Market Insights—Because of our management team’s vision and our status as a sought-after partner within the digital currency industry, we see potential opportunities that many legacy financial services providers as well as digital currency market participants may not be able to see in the near-term. We believe that this unique position within the market will enable us to continue developing next generation financial infrastructure solutions and services and extend our first-mover advantage. Capitalizing on these opportunities has the potential to significantly accelerate our growth beyond the drivers visible to most market participants today and help us grow our position as a leading provider of innovative financial services infrastructure solutions and services to the digital currency industry.”
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