Silvergate Capital hasn’t given any official reason behind postponing its plan of a stablecoin launch.
During their earnings call on Tuesday, October 18, Alan Lane, the CEO at Silvergate Capital confirmed that they won’t be launching their stablecoin this year.
“We’re certainly disappointed that it looks like we’re gonna miss our goal of launching it this year,” said Lane. The company also added that it is currently working to build its operational and regulatory compliance “muscle” in order to ensure a smooth launch.
Silvergate Bank is one of the largest crypto banks currently in the market. At the beginning of 2022, Silvergate Capital acquired the crypto technology from Diem, the stablecoin project of Meta platforms (formerly Facebook) launched earlier in 2019.
However, Lane has confirmed that the delay isn’t due to a technology-related issue. The executive also confirmed that Silvergate is in a strong position versus other banks to bring its tokenized dollar to the blockchain.
During Tuesday’s trading session, Silvergate’s stock tanked 20% after reports of earnings miss including a slowdown in USD transfers along with digital deposits.
Bullish on Bitcoin Lending
Silvergate has been offering loans to several crypto firms while accepting Bitcoin as collateral. Earlier this year, business intelligence firm MicroStrategy took a major loan from Silvergate while putting its Bitcoins as collateral.
MicroStrategy said that they will use these funds to buy more Bitcoins. This was also the largest loan secured by any Bitcoin holding company. Company CEO Alan Lane stated that he is still bullish about the Bitcoin lending business and expects it to grow with time.
However, with the broader market condition, Lane remains practical and expects the pain in the market to continue for a while. “Over the coming quarters, the crypto industry may still pose challenges for some exchanges and crypto funds. However, at some point, all that will be over, and then we will just be waiting for what is the next catalyst,” he said.
The crypto winter of 2022 has majorly impacted the company’s earnings this year. As a result, it has also impacted the company’s stock price to a great extent. The stock price of Silvergate Capital has dropped by more than 66% since the beginning of 2022 and currently trading at $55.
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