Mar 17, 2023

BCB Group is accelerating plans to add U.S. dollar capabilities to help fill the hole left by the recently shuttered Silvergate Exchange Network or SEN.

Video transcript

The Silver Gate Exchange network or sen at now shuttered Silver Gate Bank was considered critical crypto infrastructure that allowed companies to transfer payments quickly. But with Sun gone, cutting off crypto firms from banking on and off ramps who will fill the void joining us now is BC B group CEO Oliver, Von Landsberg, Sadie Oliver. So BC B Groups is accelerating plans to add us dollar capabilities to help fill the hole left by the recently shuttered Silver Gate exchange network or sen tell us about it. First of all, thanks for having me on the show. Right? I'm a, a regular viewer, I think. Um, we've got the, the Europe's version of sign and send up and running. It's been up and running for two or three years. We've done tens of billions of volume through it, but it's um US D has always been a missing component of the offering and we never wanted a, you know, a competing and, uh, and, and, uh, and, and, and because they were frankly doing, uh you know, a really good job, um it's missing now and it filled a critical part of the ecosystem. It made things frictionless it, uh it helped with market efficiency. It was an essential part of the US DC infrastructure. And um you know, our goal is just to try and use our position of advanced traction in the currencies. We do support to extend that continuity for dollars as well. So, um you know, obviously we got to ask this because of what's going on in the United States. Uh Right now where you have signature and Silver Gate both going under. Uh and they, they provided the two big networks here and, and that you're, I guess looking to replace um any concerns. Look, we just had, we just had a, a regulator on saying that crypto was not the reason these banks or, or rather the networks weren't the reason why these banks were shuttered. But is there any concern about at least the potential that regulators might go after uh might go after this new this network as well? That, that it might also face the sort of uh uh a pressure from regulators that signature and Silver Gate faced crypto as a whole. The crypto industry regularly tries to, it, it says it's being misrepresented by regulators. And, and I think we must observe here that I think there is a bit of misrepresentation of the regulator's point of view there, you know, operation choke point was popularized as a, as a kind of a theory that um that uh spoke of the hostility of, of the regulators of the crypto industry. But it's not that what we've seen here is not, um you know, it can't be characterized as a hero, an antihero or two opponents. It is um the regulators are just trying to protect the markets. What they saw was a concentration risk in a flow that is not completely regulated yet. And what they saw was banks whose capital structure was not sustainable for the level of flow that was pushing through here. So yes, we, we will face the same scrutiny, but we're building this in a different way. We're building it in a much more diverse way, not a single point of failure, multiple banks supporting the depository. And when we choose those banks to be part of the network, it is, we take a really close look at the capital structure. Are we going to fall into the same traps that have caught uh Silvia and Signature and Silicon Valley Bank recently? Um or can we produce a more sustainable solution by effectively decentralizing that risk? Um And I think that's what's gonna keep the new model afloat is not having that single point of failure and what's gonna keep regulators happy as well. So now if you could just explain a little bit about the differences here as well as you, you brought up there, is that difference. So you say it's more decentralized uh nonetheless, is it uh what actually will be exchanged, will cryptocurrencies flow within the network. What's the difference between this and snet and send San and both carried dollars, they carried a digital representation of dollars, but it was still dollars. It wasn't um a stable coin or it wasn't another kind of tokenization. And in that respect, it is the same um a client who has a blink account in a non university currency uh can top up their blink account with that currency. It carries that currency which is banked 1 to 1. Um So it is, I'm so sorry, I've got a little cross uh talk uh uh from the, from the crew here, which is a um so it is the, it is the same in terms of its business model. Um but it is different in that the underlying bank is multiple banks. Um but it's not a Cryptocurrency. It is, um it is a payment between two entities that have been fully on boarded. They've been KFC, they've been AM L they're known entities and it's a closed network. Everybody who's in the network is, is properly on boarded as opposed to uh cryptocurrencies where you can send wallets semi, uh you can send value semi anonymously. Does that make sense? Yeah. Yeah. Well, interesting to see uh other companies step up where uh we're seeing, avoiding crypto and certainly there are a lot of crypto companies looking for alternatives. Oliver, thanks for joining us this morning. That was BC B Group CEO Oliver von Landsberg, Sadie and don't miss Oliver speaking at consensus in April, you can still register at consensus dot coindesk dot com.

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