Has the crypto industry discovered a new friend after crypto-friendly banks like Silvergate and Silicon Valley collapsed?
Following the banking collapse in March, the crypto industry seemed in trouble in the United States. But Customers Bancorp Inc. might have emerged as the new alternative.
Customers Bank Attracted Crypto Clients Through Its CBIT Facility
According to Bloomberg, the Pennsylvania-based Customers Bank has partnered with “hundreds of digital-asset firms, including major exchanges, market makers and stablecoin issuers.” Customers Bank facilitates 24/7 USD transactions for crypto companies through its real-time payments platform, Customers Bank Instant Token (CBIT).
Due to the collapse of crypto-friendly banks such as Silvergate and Silicon Valley, crypto businesses signed up with Customers Bank to facilitate USD transactions. Some notable examples are USDC issuer Circle, crypto exchange Coinbase, and crypto custodian BitGo.
Read more about the US banking collapse here.
Piper Sandler analyst Frank Schiraldi believes that after major crypto-friendly banks collapsed, Customers Bank enjoyed minimum competition. He said:
“With Signature and Silvergate basically shutting their doors, these balances had to go somewhere. Customers Bank really seems to be the last man standing.”
Shying Away From Title of Crypto’s Favorite?
The recent crackdown on crypto by cutting banking facilities, also referred to as Operation Chokepoint 2.0, has resulted in banks distancing themselves from crypto companies. Alma Angotti, a former Securities and Exchange Commission (SEC) officer, told Bloomberg:
“Customers Bank’s larger crypto role could bring additional attention from regulators, who are clamping down after warning banks earlier this year of the risks of doing business with the industry.”
Due to these reasons, it is obvious that the banks would not want to be identified as crypto-friendly. As a matter of fact, Customers Bank removed a webpage that highlighted “Real-time Payments for Cryptocurrency Institutions.”
Also, the bank limited its CBIT deposits to 15% of the total deposits.
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