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Title: Silvergate Bank Eyes Crypto-Backed Loans for Institutions Post by: angelo2 on August 19, 2019, 07:38:04 PM Silvergate Bank, one of the cryptocurrency industry’s few go-to financial service providers, is planning to become a crypto lender.
According to an updated IPO filing, Silvergate, which serves some of the cryptocurrency world’s top firms like Coinbase, Bitstamp, Genesis Trading, Blocktower Capital, Polychain Capital and Xapo, has seen increased demand from the industry and is aiming to become an even more crypto-focused institution. In particular, the bank is planning to offer fiat loans, collateralized with crypto, to institutional clients as a part of the Silvergate Exchange Network (SEN) – a payment system specifically designed for crypto exchanges and their big clients. https://www.coindesk.com/silvergate-bank-eyes-crypto-collateralized-loans-for-institutions Title: Re: Silvergate Bank Eyes Crypto-Backed Loans for Institutions Post by: Harlot on August 19, 2019, 08:04:28 PM This would make sense for them especially if they are known to handle crypto-based companies like Coinbase and Bitstamp these exchanges doesn't really have anything else to offer as collateral asset wise as they are just exchanges. But a crypto bank loan institution can be subject to a lot of scrutiny as they are both in the crypto industry as well as the financial industry. I expect them to be heavily regulated since they will always be a subject to criminal activity such as money laundering from their clients. This won't be a walk in the park for them especially when a lot of eyes are starting to shift over cryptocurrencies.
Title: Re: Silvergate Bank Eyes Crypto-Backed Loans for Institutions Post by: bitart on August 19, 2019, 10:00:06 PM This is already done, it's just smaller:
The project is the INLOCK and as far as I know it helps giving out loans in stablecoins and the loans are backed by cryptos like Bitcoin and the main alts. As soon as the exchange rate goes against the lender, an automated transaction is closing the loan and the collateral is used to pay back the loan, but if the exchange rate is fine, the loan will continue. Title: Re: Silvergate Bank Eyes Crypto-Backed Loans for Institutions Post by: hugeblack on August 20, 2019, 03:00:28 PM If the banks enter the field of crypto lending, it will be dealing by proving payment of the value of cryptos and not the currency itself, just as happened with gold.
This type of lending will create a new opportunity to speculate on currencies that the bank does not have as a reliable party. The phrase "collateralized with crypto" reinforces the concerns I have mentioned. |