Crypto custody bank Anchorage Digital is expanding its lending service with ethereum-backed loans through BankProv, a traditional Massachusetts-based bank formerly known as Provident Bank.
Anchorage already provides bitcoin-backed loans through other capital providers, including Silvergate Bank, and is looking to provide institutional clients bank-grade loans on their ethereum as well.
Crypto-lending startups have offered ethereum-backed loans for some time – ETH makes up 27% of Genesis’ loan book – but this seems to be the first time ETH-backed loans have been extended through an FDIC-insured bank.
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“A lot of clients have ethereum that’s highly appreciated, and they can’t get liquidity because no one extends them credit on those assets,” Anchorage co-founder Diogo Mónica said.
In July 2019, BankProv said it was going to begin banking digital-asset firms with the help of compliance firm Treliant and Bitfury’s blockchain analytics platform, Crystal.
With $1.5 billion in assets, BankProv is smaller than some better-known crypto-friendly banks such as Silvergate and Signature. It has, however, recruited from other banks that have worked in the digital-asset industry, including Radius Bank and Metropolitan Commercial Bank.
Anchorage has had the ability to extend ETH-backed loans to its clients, but forming partnerships with other banks is allowing it to scale its crypto-backed lending product, Mónica said.
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“On a daily basis there are more banks coming in,” he said.
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