The bank that bought assets from Zuckerberg’s Diem plans to launch a stablecoin

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Silvergate Capital CEO Alan Lane told CNBC on Monday that the bank holding company hopes to launch a stablecoin by the end of this year, following its acquisitions of cryptocurrency project assets and intellectual property. beleaguered by Mark Zuckerberg.

The California-based financial firm, which through its subsidiary Silvergate Bank operates the crypto-focused payments platform Silvergate Exchange Network, confirmed on Monday that it was buying assets from Diem Group. Silvergate was previously a partner in the Facebook-backed project.

“The engineers at Facebook who have been developing this over the past two years are truly world-class engineers,” Lane told “Mad Money” host Jim Cramer in an interview. “We were working last year with Diem and got to know the team very well, and we couldn’t be more excited about basically taking the reins and hopefully bringing a stablecoin to market. later 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 make real-time, 24/7 transfers between them. Crypto trading platforms such as Coinbase Global and Gemini are part of the Silvergate Exchange Network.

Lane told Cramer that Silvergate hopes to expand the everyday utility of stablecoins, which are a type of digital asset whose value is pegged to traditional currencies such as the US dollar. Currently, Lane said they are mainly used in crypto trading.

“We think the potential value is off the charts when we think about using blockchain technology for payments and remittances,” Lane said, after Cramer asked Silvergate how much Diem’s ​​assets were worth. The Wall Street Journal reported last week that the bank paid around $200 million, citing an unnamed source.

The Silvergate Exchange Network is already used by existing stablecoin issuers to create and redeem the digital tokens, Lane said. “But again, these are primarily used for cryptocurrency trading. Where we see the opportunity is to create a stablecoin that could be used by people…to pay for things.”

“That’s kind of the original bitcoin promise, but people don’t want to spend their bitcoin with all that volatility. But the blockchain technology is there, and we think that’s what a stablecoin issued by Silvergate can provide. “, did he declare.

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