BCB Group, a payment service provider that ties cryptocurrencies to the banking system, is launching US dollar payment capabilities to fill the hole left by the recently closed crypto-focused bank Silvergate. The company is accelerating plans to add more, CEO Oliver von Landsberg-Sadie said in an interview with CoinDesk.
London-based BCB is the first cryptocurrency company to receive a payments license from the UK regulator, the Financial Conduct Authority (FCA), and is the first cryptocurrency company in Europe to operate in the British pound, euro, Swiss franc, yen and other legal tenders. It provides a rail to crypto assets for institutional investors such as Bitstamp, Galaxy Digital, Gemini and Kraken.
Banking is a thorny problem for crypto companies. Many cryptocurrency companies have the ultimate goal of reinventing traditional finance. The recent bankruptcies and scandals have triggered a shotgun response from US regulators and could be seen as a crackdown on crypto banks, at least for Silvergate.
In mid-2020, BCB launched its instant payments network, the BCB Liquidly Exchange Network Consortium (BLINC). This is an instant gross settlement system for Euros, British Pounds and Swiss Francs, similar to the Silvergate Exchange Network (SEN), which until recently Silvergate offered to its large cryptocurrency clients trading in dollars in the United States. It’s from
New York-based Signature Bank’s Signet is also SEN’s counterpart, the second-largest network for real-time US dollar payments, notably meeting some of the demand. . That said, the dollar-denominated component of BLINC has been in development for about a year now and is ready for launch, Ransberg-Sadi said.
Following the news of Silvergate shutting down the network, Ransberg-Sadi said, “Of course, we want to launch as soon as possible. BCB and Silvergate have overlapping customers, so they will be impacted by the SEN outage. I will do whatever is necessary to ensure that those who have been with us have some continuity.”
The main difference between BLINC and SEN is that BLINC is multi-currency and not tied to a single credit institution like Silvergate or Signature Bank, Lansberg-Sadi said. It was built as a clearinghouse to serve banks in the UK, Switzerland, the eurozone and elsewhere, and was not designed to accept deposits, he added.
“It’s a decentralized model,” Ransberg-Sadi said. “What you get with Silvergate and Signature is a credit agency solution that applies primarily to payment problems. Silvergate is an irreversible position in the crazy market of 2022. It started with allowing long-term Bitcoin betting against short-term cash deposits.BLINC funds are 1:1, no leverage, no re-collateralization, always 1:1 with accurately protected funds.”
｜Translation: coindesk JAPAN
｜Editing: Toshihiko Inoue
| Image: BCB Group Founder and CEO Oliver von Landsberg-Sadi (BCB Group)
｜Original: Crypto Banking Firm BCB Readies US Dollar Payments to Plug Silvergate Gap