As we know, the relationship between banks and cryptocurrencies is a story of hate and love, rejecting digital assets in the beginning, but accepting them for a happy ending. This is the case of Signature Bank, which has reported raising a billion dollars only in crypto deposits, according to a report analyzing the second quarter of the year.
It should be noted that the report proposes an increase of almost $ 8 billion in deposits recorded by the bank. Therefore, this increase in crypto deposits is a new record for the agency, increasing the participation of digital assets within the bank’s infrastructure.
With all this, in a call to the bank’s shareholders. Signature CEO Joseph DePaolo also attributed the progress of crypto deposits to a surge in all of the bank’s business lines, including the Blockchain-based payment platform Signet.
It should be noted that the cryptocurrency sector is often a rich source of low-cost, interest-free deposits. Especially for banks like Signature Bank, Silvergate Bank and Metropolitan Commercial Bank. Consequently, analysts have taken into account the growth of Signature’s crypto deposits.
Similarly, DePaolo indicated in the earnings report the following:
“This is now the fourth consecutive quarter that exceeds $ 1 billion in deposit growth, both total and average.”
He also added: “Crypto deposits without interest of $ 16.1 billion, still represent a high 32% of total deposits, since the second quarter of last year“
However, according to statements by Joseph DePaolo: “The cost of those crypto deposits also decreased to 56 basis points from 98 basis points, due to the low interest rate. That is why, in order to improve profitability, the bank wants to reduce the cost of deposits by around 40 basis points.“
Eric Howell, the bank’s executive vice president of corporate and business development, said in a call to the bank’s shareholders. Commenting that the bank’s net interest margin will increase if the bank returns to more stable deposit growth. Probably between $ 500 million and $ 1 billion per quarter according to their forecasts.
As a consequence, the bank earned around $ 117 million in the second quarter of 2020. However, it 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.
Copper Joins Signet, Signature Bank’s Blockchain Payment Platform
This integration means that Copper customers, such as crypto exchanges, will now be able to use Signet for faster payments and settlement times, in transactions with US dollars.
With this in mind, Dmitry Tokarev, the CEO of Copper stated:
“Previously, the transaction settlement and payment process was much more complex.”
Adding: “To route fiat currencies, customers had to go to their exchange account, return to Signature Bank, and then return to their exchange account. Now fiduciary and digital assets can be moved within the Copper platform“
To close, Copper offers multiple firm custody and primary brokerage to its clients. This is provided by Copper’s Walled Garden infrastructure. Mainly by giving customers access to commercial facilities without removing digital assets from custody.
I bring as a dimension the following message from Thomas Jefferson: “Never spend your money before you have it“