As we know, the relationship between banks and crypto-currencies is a story of hate and love, rejecting digital assets at the beginning, but accepting them for a happy ending. This is the case for Signature Bank, which has reported raising $1 billion in crypto deposits alone, according to a report analyzing the second quarter of the year.
It should be noted that, the report states an increase of almost $8 billion in deposits registered by the bank. Therefore, this increase in crypto deposits is a new record for the agency, increasing the share of digital assets within the bank’s infrastructure.
With all this, in a call to the bank’s shareholders. Signature’s CEO, Joseph DePaolo, also attributed the progress in crypto deposits to an increase in all of the bank’s business lines, including the Signet payment platform based on Blockchain.
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It should be noted that the crypt-currency sector is often a rich source of low-cost, non-interest bearing deposits. Especially for banks such as Signature Bank, Silvergate Bank and Metropolitan Commercial Bank. Consequently, analysts have taken into account the growth of Signature’s crypto deposits.
Similarly, DePaolo stated in the earnings report, the following:
„This is now the fourth consecutive quarter that we have exceeded $1 billion in deposit growth, both total and average.
He added, „Non-interest bearing crypto deposits of $16.1 billion still represent a high 32% of total deposits, up from the second quarter of last year.
However, according to Joseph DePaolo’s statements: „The cost of these crypto deposits also decreased to 56 basis points from 98 basis points, due to the low interest rate. Therefore, in order to improve profitability, the bank wants to reduce the cost of deposits by about 40 basis points.
Eric Howell, the bank’s executive vice president of corporate and business development, commented in the call to the bank’s shareholders. He commented that the bank’s net interest margin will increase if the bank returns to more stable Bitcoin Trader deposit growth. Probably between $500 million and $1 billion per quarter, according to his forecasts.
As a result, the bank earned about $117 million in the second quarter of 2020. However, that is a significant decrease from $147 million in the second quarter of 2019. After placing a provision for credit losses of $93 million in this last quarter.
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Copper joins Signet, Signature Bank’s Blockchain payment platform
This integration means that Copper customers, like crypto exchanges, will now be able to use Signet for faster payments and settlement times on US dollar transactions.
With this in mind, Dmitry Tokarev, Copper’s CEO said:
„Previously, the process of payment and settlement of transactions was much more complex.“
He added, „To route fiat currencies, customers had to go to their exchange account, return to Signature Bank, and then return to their exchange account. Now, trust and digital assets can be moved within the Copper platform.
To close, Copper offers multi-signature custody and prime brokerage to its clients. This is provided by Copper’s Walled Garden infrastructure. Primarily, providing customers with access to business facilities without removing digital assets from custody.
I bring as a note the following message from Thomas Jefferson: „Never spend your money before you have it.