The crypto financial institution Silvergate Capital (NYSE:SI) and Facebook (NASDAQ:FB) have introduced a partnership that may see Silvergate develop into the unique issuer of the Diem U.S. greenback stablecoin, previously know as Facebook’s Libra venture.
Stablecoins are cryptocurrencies tied to different belongings akin to Gold or the U.S. greenback so as to present extra stability to the digital forex, however nonetheless reap the benefits digital currencies can supply when it comes to funds options.
Not solely will Silvergate develop into the unique issuer of the Diem, however it can additionally handle the Diem reserve.
“We consider sooner or later of U.S. greenback backed stablecoins and their potential to remodel present cost programs,” Silvergate Capital’s CEO Alan Lane mentioned in an announcement. “We’re impressed by Diem’s know-how and dedication to constructing a regulatory compliant cost system that gives a secure and safe means to transfer cash. We’re excited to be at a spot within the course of the place we will announce this product with confidence and look ahead to persevering with our work with Diem to convey this to market.”
Image supply: Getty Images.
The Diem Association is a member-based affiliation with retailers, cost service suppliers, social affect companions, and different entities. Its aim is to supply a extra environment friendly and lower-cost funds answer that’s safer, and might shield shoppers and combat monetary crime.
Silvergate is a small $7 billion asset financial institution that makes a speciality of banking crypto exchanges and institutional trades of cryptocurrencies that work together with each other.
Its Silvergate Exchange Network (SEN) is a real-time funds community that may clear transactions in U.S. {dollars} immediately across the clock, twelve months a yr, between two customers within the community. It’s ultimate for crypto merchants and exchanges as a result of cryptocurrencies commerce across the clock.
On Silvergate’s current earnings name, administration mentioned SEN already offers every of the 4 regulated U.S. stablecoin issuers with vital infrastructure to function. The financial institution additionally mentioned stablecoins current a major price earnings alternative.
Shares of Silvergate have been up greater than 18% in after-hours buying and selling as of 6:10 p.m EDT.
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