US-based Silvergate Bank on Tuesday announced its partnership with Bitstamp for the launch of its new Bitcoin leverage product.
Dubbed SEN Leverage, the bank will first roll out a pilot version of the product, which will be offered only to some selected institutional clients.
Based on the Silvergate Exchange Network (SEN), the new product will allow institutional customers to trade collateralized by Bitcoin with leverage provided by the platform.
SEN enables real-time payments with facilities of deposits and withdrawals of the US dollar. The service is also available around the clock and is primarily used to fund loans and process repayments. The network also attracted major players in the industry, including Kraken and Gemini.
Viberate Teams Up with Blockparty to Deliver World’s First Live Event NFTGo to article >>
As the announcement detailed, Bitstamp’s role as the California-headquartered bank’s first exchange partner will be to provide custody services and manage the Bitcoins used as collateral.
“Bitstamp already uses the SEN network to provide 24/7/365 account funding to eligible customers,” the announcement stated. “We are excited to be working with Silvergate Bank to offer a product that will enable our clients to manage their bitcoin positions with more flexibility.”
Banking for crypto firms
Though founded in 1988, Silvergate changed in business models in recent years and focused on crypto businesses. It is providing banking services to the crypto firms, thus filling the gap between the hostile banking sector and the digital asset industry.
According to a filing with the US Securities and Exchange Commission (SEC) last year, the bank revealed that it is providing banking services to 756 crypto clients till last September. It also tapped major clients, including Coinbase, Bitstamp, Genesis Trading, Blocktower Capital, Polychain Capital, and Xapo.
The bank also dived into the crypto lending industry with the offering of fiat-based loans to institutional clients against digital assets as collateral.