February 2, 2022: -On Monday, Silvergate Capital CEO Alan Lane told CNBC the bank holding company hopes to launch a stablecoin by the end of this year, following its acquisitions of assets and intellectual property from Mark Zuckerberg’s beleaguered crypto project.
Through its subsidiary Silvergate Bank, the California-based financial firm operates the crypto-focused payments platform Silvergate Exchange Network, that confirms it was buying assets from the Diem Group on Monday. Silvergate had been a partner on the Facebook-backed project.
“The Facebook engineers that developed this over the last couple years are truly world-class engineers,” Lane told “Mad Money” host Jim Cramer in an interview. “We were working in the previous year with Diem, and we got to know the team very well, and we couldn’t be excited too, essentially, be taking the reigns and bringing a stablecoin to market hopefully this year.”
With Lane at the helm, Silvergate Bank is known for being one of the first traditional banks to embrace digital currencies. Its Silvergate Exchange Network offers account holders the ability to execute real-time, 24/7 transfers among themselves. Crypto trading platforms like Coinbase Global and Gemini are part of the Silvergate Exchange Network.
Lane told Cramer that Silvergate is hoping to expand the everyday usefulness of stablecoins, a type of digital asset with its value pegged to traditional currencies such as the U.S. dollar. Right now, Lane said they’re primarily used in crypto trading.
“We think the potential worth is off the charts when we think about using the blockchain technology for payments and remittance,” Lane said after Cramer asked how much Silvergate thinks Diem’s assets are worth. in the previous week, the Wall Street Journal reported that the bank paid about $200 million, citing an anonymous source.
Lane said that existing stable coin issuers already use the Silvergate Exchange Network to create and redeem digital tokens. “But again, those are primarily used for cryptocurrency trading. Where we see the opportunity creates a stablecoin that folks could use to pay for things.”
“It’s the original promise of bitcoin, but folks don’t want to be spending their bitcoin with all that volatility. But the blockchain technology is here, and we think that’s what a stablecoin issued by Silvergate can provide,” he said.
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