Silvergate Capital Corporation has added Fidelity Digital Assets as a custodian for SEN leverage. This makes Fidelity Digital Assets the second major custodial services to join Silvergate in a week following Coinbase Custody’s addition.
Fidelity Clients to Access Silvergate Loan Opportunities
This development was announced in a press release by Silvergate on March 29, 2021. According to the report, the development will enable Institutional investors who store their bitcoin with Fidelity Digital Assets easy access to SEN Leverage.
SEN Leverage is the primary product of Silvergate Capital and provides secure institutional access to capital through U.S dollar loans collateralized by bitcoin. SEN Leverage allows institutional investors to receive cash inflow by entering into a loan agreement with Silvergate Bank.
The bank uses its proprietary payment network Silvergate Exchange Network to process the loan. In return, investors use bitcoin as their collateral held by Fidelity Digital Assets in a cold storage account.
Jon Melton, director of digital asset lending at Silvergate believes that the bank is well-positioned to become a major player in the lending sector. “With Fidelity Digital Assets on board, we’re combining our exceptional lending program with a leading custody services platform, providing investors with greater access to capital,” he further added.
Christine Sandler, head of sales and marketing at Fidelity Assets, offered similar sentiments about the partnership. “Like Silvergate, we recognize the opportunity to create a more seamless investor experience by helping institutions maximize capital efficiency, as well as the opportunity to strengthen the digital assets ecosystem through greater integration and collaborations like this,” she said.
SEN Leverage is a financial product backed by Silvergate and is one way the U.S bank is looking to leverage increasing interest in digital assets. The ability to use bitcoin as collateral shows the growing change in the traditional finance system as the leading coin is regarded as an asset of value.
Institutional Adoption on the Rise
Institutional adoption of crypto assets has witnessed significant growth in the past six months. More traditional financial companies have begun to offer crypto-based services as demand levels continue to grow.
Earlier in March 2021, BTCManager informed that Jamie Dimon’s JPMorgan had listed a massive 56 vacancies for distributed ledger technology (DLT) professionals, making it clear that it’s aiming to strengthen its blockchain division.