Silvergate is the leading financial services provider for top Crypto exchange companies such as Xapo, Bitstamp, and Coinbase. The latest report indicates that the bank intends to roll out Crypto lending services. The new product will significantly revolutionize the Crypto economy and allow market players to expand their trading solutions. This report is contained in the recently published Initial Public Offering (IPO) application that the bank has filed.
Definition Of Crypto Lending
Crypto Lending is a financial transaction where a lender sells a loan to a client. However, unlike in the traditional commercial setup where the collateral can be in the form of a land title, property ownership rights, or even guarantees, in this case, the bank only requires the borrower to deposit a designated amount of Cryptocurrency to serve as collateral for the loan.
It is critical to note that Crypto lending is not offered in Digital Tokens but Fiat currencies.
Silvergate Bank Says The Demand For Crypto Lending Is Bullish
As a bank that links participants in the Crypto economy to the monetary policy-based mainstream economics, Silvergate Bank is a crucial financial player that has been able to collect cross-sectional data regarding the latest trends in the Digital Tokens market. One of the findings is that there has been a steady growth in the demand for Crypto lending services.
In response to the current market dynamics, Silvergate Bank is hence planning to launch the market-driven solution in an unspecified time.
Silvergate Bank Is The Financial Partner Linking Crypto Exchanges And Their Clients
Crypto trading platforms are marketplaces where Crypto traders meet to exchange Cryptos. Moreover, these sites allow hodlers to hodl their Tokens by offering secure wallets for securing private keys.
The role of Silvergate Bank in the development and sustenance of some of the Crypto trading sites business models cannot be overstated. The bank facilitates transactions between the platforms and their clients.
The financial services provider uses the Silvergate Exchange Network (SEN) that hosts all transactions to ensure that the transfer of data is secure, private, and instant.
SEN Is Set For An Upgrade
On top of proposing to add the support for Crypto lending on its network, Silvergate Bank is also announcing plans to add the support of Stablecoin air lifters. Nonetheless, the bank has been supporting the development of Stablecoins by holding the Fiat deposits that are used to peg Tokens.
In the meantime, Silvergate Bank has been aiming to become a custodian for Crypto-currency funds managers and also to launch trust companies. To achieve this milestone, the institution is keen on obtaining the New York State Bitlicense.
Silvergate Bank Operating Model Is Solving Issues Affecting Cryptos
There are several issues which have been holding back Cryptocurrencies from realizing their full potential. Some of the factors include; extreme price volatility, uncertainties about legal regulations, and inadequate custodial services.
By offering Crypto lending services, Silvergate Bank will enable institutional and retail investors to join the Crypto economy to benefit from Crypto-secured loans.