Published
3 years ago on
March 24, 2021
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Silvergate Capital Corporation announced the cryptocurrency custody solutions provider, Coinbase Custody as their custodian for loans collateralized by Bitcoin. Silvergate provides financial infrastructure solutions to the crypto industry. Jon Melton, director of digital asset lending at Silvergate, stated,
"Traditional lending services generally do not exist in the digital currency industry, which means there aren't many lenders for investors to choose from. Our relationship with Coinbase Custody offers institutional investors increased access to capital efficiency so they can take advantage of market opportunities in the digital currency industry."
Bitcoin As Collateral For USD Loans
The Silvergate Exchange Network (SEN) facilitates loan disbursements and repayments in real-time, 365 days a year. SEN Leverage provides secure, institutional-grade access to capital through US dollar (USD) loans collateralized by bitcoin.
Institutional investors receive USD financing using SEN Leverage through a loan agreement with Silvergate Bank. Silvergate will use its proprietary payments network, SEN, to fund the loans. Coinbase Custody holds the investor's bitcoin collateral in a segregated cold storage account.
Sam McIngvale, chief executive officer of Coinbase Custody, said,
"We're thrilled to have been selected by Silvergate to expand their industry-leading SEN Leverage product. As one of the global leaders in the custody of digital assets, we feel this is a relationship of equals and we're happy to help Silvergate work toward their goal of maximizing capital efficiency for this rapidly growing industry."
SEN Leverage begins its loan amounts at $ 5 Million for an initial 12-month term and is subject to credit approval. The loan can be renewed at the end of the term with interest calculated daily and is due monthly. Melton further added,
"In addition to having access to traditional USD financing, SEN Leverage is even more valuable to our customers because we can provide a first-rate custody experience through Coinbase Custody."
About Silvergate
Silvergate Capital Corporation provides financial infrastructure solutions and services for the rising cryptocurrency industry. The SEN, Silvergate's real-time payments platform, offers a customer-centric suite of payments serving crypto companies and investors globally.
Silvergate aims to enable the rapid growth of crypto markets with a vision towards a digital currency future. As Silvergate made SEN Leverage a complete product offering in Q4 2020, loan volumes saw increases from $35.5 Million in Q3 2020 to $82.5 Million at the end of Q4.
About Coinbase Custody
Coinbase Custody is one of the largest custodians in the crypto industry and operates as a standalone, independently-capitalized business to Coinbase, Inc. It provides financial controls for institutions and companies that want to trade cryptocurrencies. Coinbase Custody is a fiduciary under NY State Banking Law and a qualified custodian.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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