Anchorage to Offer Ethereum-Backed Loans Through BankProv
This is the first time Anchorage has extended ETH-backed loans through a traditional, FDIC-insured bank.
Crypto custody bank Anchorage Digital is expanding its lending service with ethereum-backed loans through BankProv, a traditional Massachusetts-based bank formerly known as Provident Bank.
Anchorage already provides bitcoin-backed loans through other capital providers, including Silvergate Bank, and is looking to provide institutional clients bank-grade loans on their ethereum as well.
Crypto-lending startups have offered ethereum-backed loans for some time – ETH makes up 27% of Genesis’ loan book – but this seems to be the first time ETH-backed loans have been extended through an FDIC-insured bank.
“A lot of clients have ethereum that’s highly appreciated, and they can’t get liquidity because no one extends them credit on those assets,” Anchorage co-founder Diogo Mónica said.
In July 2019, BankProv said it was going to begin banking digital-asset firms with the help of compliance firm Treliant and Bitfury’s blockchain analytics platform, Crystal.
With $1.5 billion in assets, BankProv is smaller than some better-known crypto-friendly banks such as Silvergate and Signature. It has, however, recruited from other banks that have worked in the digital-asset industry, including Radius Bank and Metropolitan Commercial Bank.
Anchorage has had the ability to extend ETH-backed loans to its clients, but forming partnerships with other banks is allowing it to scale its crypto-backed lending product, Mónica said.
“On a daily basis there are more banks coming in,” he said.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.
Learn more about Consensus 2024, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.