SVB and Silvergate are out, but big banks are still backing crypto firms
Over the past week, the collapse of three of the biggest banks supporting the crypto scene – Silicon Valley Bank (SVB), Silvergate Bank, and Signature Bank – has left many industry experts wondering how US-based crypto companies will fare after such losses.
Although it has been said that “no one is left to bank crypto companies”, some in the crypto space have already highlighted the remaining options.
One Twitter user called out another after they said there are “basically none left to bank crypto companies in the US” by listing some banks with crypto clients.
Along with that rebuttal, various users started compiling lists of banks that may still be long-term options for smaller crypto operations. Although the situation around banks, crypto and stablecoins is fragile, there are still common options for those working in the space.
Bank of New York (BNY) Mellon
On October 11, 2022, BNY Mellon announced the official launch of its digital custody platform for institutional clients to hold Bitcoin (BTC) and Ether (ETH).
BNY Mellon reports having $43 trillion in assets under custody, although it has not disclosed how much of the total includes BTC and ETH holdings. In March 2022, Circle selected BNY Mellon as one of its custodians for its USD Coin (USDC) reserves.
On February 9, during a cryptocurrency panel at Afore Consulting’s 7th annual FinTech and Regulation Conference, the bank’s head of advanced solutions, Michael Demissie, said digital assets are “here to stay.”
In light of the recent events involving SVB, Circle also announced that it was working on “expanded relationships” with existing partners, including BNY Mellon.
JPMorgan launched its Onyx Digital Assets platform back in November 2020, which has since processed over $430 billion in transactions.
Recently, the firm began exploring “deposit tokens” as an alternative to privately issued stablecoins and central bank digital currencies on commercial bank blockchains.
Recent: Crypto industry may escape lasting damage from Silvergate liquidation
Deposit tokens could theoretically exist in both public and permissioned blockchain environments for uses including peer-to-peer payments, supporting smart contract programmability, or serving as cash collateral.
JPMorgan has also piloted the use of blockchain, including collateral settlements, repurchase agreements and cross-border transactions.
Cross River, a US-based financial services firm, provides crypto solutions to fintech companies. It has served clients both inside and outside of the crypto space, including cryptocurrency exchange Coinbase and financial services giants Visa and Mastercard.
On March 13, days after the USDC depegging, Circle announced Cross River as its new commercial banking partner to produce and redeem USDC.
The British bank offers a custodian solution for BTC and ETH wallets and has served the likes of Coinbase and Bitstamp since it was approved to offer digital services by the UK’s Financial Conduct Authority in late January 2020.
After the SVB fallout, BCB Group CEO Oliver von Landsberg-Sadie tweeted that the group has no ties with SVB or Signature and no “own material amount” in USDC.
The bank offers instant payments for business-to-business transactions and instant settlement for cryptocurrency trading firms, exchanges, liquidity providers, over-the-counter desks, market makers and institutional investors on its “TassatPay” platform.
TasatPay has processed over $1 trillion worth of transactions since its launch in 2019, including $150 billion in January alone, according to recent reports.
Shortly after the fall of former cryptocurrency exchange FTX, Customers Bank announced that it had no ties with FTX and that its “CBIT-related deposit balances” are stable at $1.85 billion. It claimed to have over $20 billion in assets.
The Singaporean bank offers its own custody platform, DBS Digital Custody, to customers who can buy BTC, ETH, XRP (XRP), Bitcoin Cash (BCH), Polkadot (DOT) and Cardano (ADA) from the DBS Digital Custody exchange.
DBS also offers a separate financial tool, which it calls DBS Digital Exchange and is supported by the bank. DBS DDEx operates ‘members only’ exchanges, where users have access to digital assets, including security tokens and cryptocurrencies.
Customers banking with OCBC cannot purchase crypto assets directly from the platform. However, OCBC bank accounts can be linked to a licensed trading platform that it partners with, such as eToro, to purchase digital assets.
Mercury Bank prides itself on offering banking services for Web3 startups, decentralized autonomous organizations and foundations. However, it explicitly states that it cannot work with “money service companies” or exchanges.
While cryptocurrencies themselves cannot be held in a Mercury account, the FAQs section states that they do not “express restrictions” on buying crypto through a Mercury account.
The company has been active on Twitter since the string of US banks went under, saying it is ready to onboard customers affected by the incident.
Another crypto-friendly bank, Axos began offering its commercial banking customers access to TassatPay back in May 2022. TassatPay is a digital payment option on a private and permissioned blockchain-based platform that allows for 24/7 real-time payment capabilities, approved by a primary banking regulator. It has processed over $400 billion in transactions to date.
Axos also offers access to several crypto-related exchange-traded funds (ETFs), including Bitwise 10 Crypto Index Fund (BITW), Bitwise Crypto Industry Innovation ETF (BITQ), ProShares Bitcoin Strategy ETF (BITO) and ProShares Short Bitcoin Strategy ETF (BITI) , among others.
According to a recent Reuters report, banks in Switzerland are seeing an influx of interest from US crypto companies following recent events.
Crypto-focused SEBA Bank said it has experienced a “pronounced increase” in traffic to its website by visitors from the US.
Arab Bank, based in Switzerland, reported an increase in US firms, mostly in the crypto space, looking to open accounts after Silveragte doubts grew. According to the report, 80% had been Silvergate customers.
Swiss bank Sygnum is also a crypto-friendly bank with self-proclaimed claims of being “the world’s first digital asset bank.” Although it has a policy of not accepting customers from the US due to unclear rules.
More banks serving crypto firms
Although this list of available options for crypto firms is not exhaustive, it highlights that there may still be a light at the end of the tunnel.
Recent: Former Age of Empires producer talks blockchain gaming adoption and GameFi
Other banks that could be of potential interest to the crypto industry include Jewel, Series, State Street Bank, Goldman, Capital Union, First Digital and others.
Jake Chervinsky, Chief Policy Officer of the Blockchain Association, tweeted that with SVB, Silvergate and Signature’s downfall, there is now a huge gap in the space for “crypto-friendly banking.”
He continued saying that given that crypto firms will need new accounts, this is an “opportunity” for banks to seize, but without the same risk as the three that failed.