The total volume of transactions in the Silvergate Exchange Network (SEN) exceeded 100 billion dollars. In this case, SEN transactions are associated with trading of Bitcoins and stablecoins.
Silvergate Bank from La Hoya, California, has witnessed the significant adoption of its payment platform, which is open 24 hours a day, 7 days a week, acting as a fiat gateway to the crypto markets. According to Alan Lane, Silvergate’s CEO, transactions worth about $33 billion were made online just in one year, while in the first nine months of this year this figure reached $76 billion (the bank did not track how much these volumes were affected by the average Bitcoin price every year).
Silvergate also found a correlation between transactions in SEN and the growing popularity of Decentralized Finance (DeFi), as it is a transaction bank for all U.S. regulated stablecoins such as USDC and PAX. In other words, the concept of “cryptocurrency banks” can be much more attractive than traditional banks and the Silvergate report is a prime example of this.
Another potential reason for this trend is the fact that it is much easier to track transactions in a blockchain than transactions in a fiat currency. In other words, the transition of banks to a blockchain will have a positive impact on the security of financial world.
But what will happen if banks don’t join the party? There is a possibility that such banks may not be able to compete with those financial institutions that innovate in the field of cryptocurrency. They will be swept away by the rising tide of cryptocurrencies ripe to reinvent the world’s financial system one way or another.
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