Silvergate’s Traditional Rival Signature Bank Takes Competition Into Crypto As Well

After studying its rival’s 9 months performance in the crypto field, now the Signature Bank too has decided to take up the competition with its competitor i.e. Silvergate into crypto. However, Bank’s CEO is concerned that the Bank is not willing to bear any loss in the business.

Signature Bank is a present-day bank that was founded 7 to 8 years in New York, USA prior to the Financial Crisis of 2007-08. The bank’s CEO has announced recently that the bank has officially joined the crypto industry as well. He informed that from now on financial facilities in the shape of fiat and/or cryptocurrencies can be availed by its customers. These loans will be offered to customers on Bitcoin-based loans which can either be backed by crypto or cash, as the case may be.

The announcement was official made by Signature Bank’s CEO on the day of Wednesday, 21st April 2021.

After the announcement, the news went viral locally and internationally. It was later on reported that the launching of crypto credit facilities was in fact replicated by Signature Bank from its traditional rival. Silvergate, which is a commercial bank-cum-investment company, is the business competitor of Signature Bank. However, last year, Silvergate took a lead from its rival and officially announced the integration of crypto lending services. But Signature Bank did not want to replicate its rival right away but in fact, wanted to see how Silvergate performs in the first place. Silvergate initiated crypto loan facilities in June 2020. Since then it has been more than 10 months now that Silvergate has been successfully coping with them.

Other investment companies as well as financial institutions too are willing to be a part of the crypto space one way or the other. While several banks have already inculcated crypto custodial and trading services while several banks are intending to do the same. There are also institutions like Silvergate and Signature Bank such as Unchained Capital, Genesis, and BlockFI who too have been providing crypto loan facilities.

Although the majority of these banks are financially and economically sound their appetite for crypto is undeniably overpowering.

Joseph DePaolo, who is the CEO at Signature Bank, was of the view that he and his bank are expecting zero loss in the crypto business. For this purpose, he stated that the bank would not be providing crypto finance facilities to every client of the bank. Instead, crypto loan facilities will be available to certain types of customers who are capable of taking aggressive risks, if any, said DePaolo.

However, as of today, the services have not been sent live. DePaolo has said that several teams of the bank have been asked to shortlist clients who could be offered crypto loan facilities. Crypto loans will be given to only those clients who are Signature Bank’s best clients, explained DePaolo.