By
Bhushan Akolkar
April 19th, 2024
While crypto community expresses kind of ambivalent feelings about newly-created JP Morgan’s JPM Coin, a smaller NY bank – Signature Bank – claims it has actually been doing something like for nearly two months.
One of the biggest players, J.P. Morgan Chase, plans to launch what is considered to be the first cryptocurrency backed by a major bank – JPM Coin, a move that could legitimize blockchain as a vehicle for fiat cryptocurrencies.
While crypto-land is abuzz about JPMorgan’s plan to move U.S. dollars around via blockchain, a smaller New York bank has actually already been doing this for nearly two months.
Signature is one of the few banks in the U.S. that will provide deposit accounts to cryptocurrency startups, a group that also includes fellow New Yorkers at Metropolitan Bank and Silvergate Bank in San Diego.
But while these clients were the first group to adopt Signet, the bank says non-crypto businesses are signing up as well.
In addition to the previously announced American PowerNet, an independent electrical power trading firm that made Signet the payments platform for its renewable energy customers, DePaolo said Signature is bringing on two other “ecosystems” where rapid movement of money and property is important.
Since launching at the start of the year, Signature Bank’s blockchain-based Signet system has on-boarded more than 100 clients who are using it to send each other millions of dollars a day, 24/7, Joseph J. DePaolo, president and CEO at Signature Bank said:
“We can say there are trades going on in the millions some days and tens of millions other days and I would say the number of clients we have is in the triple digits.”
But while these clients were the first group to adopt Signet, the bank says non-crypto businesses are signing up as well.
He also said Signature is in talks with a title insurance company. Explaining why such an entity would be interested in real-time payments, he said:
“If you’ve ever been involved in a commercial real estate closing, usually all the lawyers are sitting around eating lunch waiting for the wire transfer.”
Signature chairman Scott Shay claimed the broad uses of Signet sets it apart.
He says:
“If you happen to be an exchange [SEN] is useful, but we developed Signet to be tailored to a wide variety of industries. It’s not crypto exchange-focused.”
Returning to JPM Coin, Shay pointed out that Signet has already received approval from the New York State Department of Financial Services (NYDFS). By contrast, JPMorgan said in its announcement that as it gets ready to launch the new product, “we will actively engage our regulators to explain its design and solicit their feedback and any necessary approvals.”
“The difference is we are actually out there doing this,” Shay concluded.