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When the crypto bank seemed recently to have its earnings growing in past months it was then assumed that it would be because of its stablecoin initiatives
Silvergate Capital has reported to have a suitably strong earnings quarterly that results for the Q1 of 2022. The reports showcase the earning data of the crypto bank has beaten the estimates that analysts assumed on revenue and earning while seeing growth in customer growth. For this growth of Silvergate, a big part is assumed to be played by the stablecoin initiative of the bank following which, Silvergate eventually has a plan of launching a stablecoin backed by US dollar for various purposes including commerce and remittance. Following its plans, Silvergate will mine and burn this stablecoin for the Silvergate Exchange Network (SEN), its real time payments network. However, it’s a matter of time after which it will be clear how things will go after the first quarter.
From the recent comments of management on its earnings for quarter one, the big takeaways included the significant effort is making on the initiative of stablecoin but still there is no clear date for launching of the pilot program. Although the management assured by reiterating its previous comments that the test program is hoped to launch this year.
It’s the same quarter when Silvergate closed its acquisition of assets belonging to Diem of Meta Platforms, which the financial institution announced previously. Apparently Silvergate was working along with the social media giant platform, former Facebook, on its stablecoin initiative before it’s shutting down due to regulatory issues.
The assets that Silvergate acquired include infrastructure that could be used for the development, deployment and operations and there are also tools for operating a payments network that is blockchain oriented and can facilitate payments for cross border remittance and commerce. Silvergate has expectations regarding the integration of Diem assets into its payment network subsidiary SEN to cost about $30 million by this year out of which roughly $8.4 million has already been incurred.
Chief Executive Officer at Silvergate, Alan Lane said during the call for first quarter earnings that the bank sees the stablecoins as a meaningful payment rail potentially for consumers and businesses all across the globe. He said that although there are so many other stablecoins in existence, the value proposition of Silvergate is that it’s highly regulated and insured as a depository institution.
Lane added that the bank knows that their customers are in need of a stablecoin backed by the US dollar that is highly scalable and regulated to further enable them to move money without barriers of borders and security, etc.
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.
