How Is Silvergate Capital's Stablecoin Initiative Going?
The crypto bank Silvergate Capital (NYSE: SI) reported strong quarterly earnings results for the first quarter of 2022, beating analyst estimates on earnings and revenue and seeing some nice customer growth as well. A big part of Silvergate's story is the bank's stablecoin initiative, in which Silvergate eventually plans to launch a U.S. dollar-backed stablecoin for commerce and remittance purposes. Silvergate plans to mint and burn this stablecoin on its proprietary real-time payments network, the Silvergate Exchange Network (SEN). Let's take a look at where things stand after the first quarter.
The big takeaway from management's recent comments on its Q1 earnings call is that significant effort is being made on the stablecoin initiative, but there is still no clear date for the launch of the pilot, although management reaffirmed previous comments that it hopes to start a pilot this year.
In the quarter, management said Silvergate closed its previously announced acquisition of the Diem assets from Meta Platforms, which the bank had been working with on the stablecoin initiative before Meta's decision to bow out. These assets include development, deployment, and operations infrastructure as well as tools for operating a blockchain-oriented payments network that can facilitate payments for commerce and cross-border remittance. Silvergate expects the integration of Diem assets into SEN to cost about $30 million in 2022, roughly $8.4 million of which has already been incurred.
Source Fool.com
