Silvergate Capital Corporation announced that Fidelity Digital Assets will be its custodian for “SEN Leverage”. Silvergate Exchange Network, or SEN, Leverage provides secure, institutional-grade access to capital through US dollar loans collateralized by bitcoin.
Institutional investors receive USD financing by entering into a loan agreement with Silvergate Bank, and Silvergate uses its network to fund the loans. The investor’s collateral – bitcoin – is held by Fidelity Digital Assets in a separate, secure cold storage account.
In addition, institutional investors who currently custody their bitcoin with Fidelity Digital Assets can get easy access to SEN Leverage. Investors looking to maintain their long bitcoin positions, for example, can use their bitcoin as collateral without the need to change custody providers or alter their position. The ability to finance positions using bitcoin as collateral is indicative of the maturing digital financial services infrastructure and gives investors additional opportunities to activate their bitcoin with a trusted custody provider.
Silvergate made SEN Leverage a full product offering in Q4 2020 and saw loan volume increase from $35.5 million in Q3 2020 to $82.5 million at the end of Q4. The robust lending product continues to grow its contribution to the overall success of the Silvergate banking platform.