In an S1/A form filed with the US Securities and Exchange Commission on 15 August 2019, the bank believes that there may be opportunities to provide digital currency borrowing facilities to deepen their customer relationships and further facilitate their interest income.
In the document, the company affirms that it found significant demand for cryptocurrency-related borrowing. The service would consist of the client providing crypto assets or US dollars as collateral in exchange for significantly greater credit. The bank would then ‘set a conservative aggregate lending amount to refine the product’, as well as it plans to develop a risk framework in order to minimise risk and develop lending models over time.
Silvergate anticipates to offer the crypto-related credit product to institutional clients later in 2019.
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