Silvergate Bank has announced a partnership with major crypto exchange Bitstamp, to offer a new product using Bitcoin as collateral for leverage. Bitstamp will be the bank’s launch partner and will serve as a custody agent for the offering. The new product is called SEN Leverage.
According to the announcement, the product is powered by the Silvergate Exchange Network (SEN), which is already used for real-time loans and settlements.
Before now, Bitstamp had already been taking advantage of the network to help fund accounts of its customers. The exchange has also expressed some excitement at the new partnership and product. In the product’s early days, it will only be available to corporate clients.
“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.”
Silvergate CEO Alan Lane has also commented on the new product. According to Lane, one of the reasons the product was created was to satisfy the bank’s crypto-forward customers. The CEO said these customers “have asked us to help them create greater capital efficiency.”
Silvergate Bank also made a filing with the U.S. Securities and Exchange Commission (SEC) which includes a few details. One of the details is that the product is only limited to Bitcoin collaterals. Last year, the bank announced a surge in its number of crypto clients.
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