Anchorage Digital to Offer Ethereum Backed Loans to Institutions with FDIC-insured Bank, BankProv
Crypto custody bank Anchorage Digital is getting into the lending business. The digital bank will now offer crypto-backed loans to its customers. The new service is in conjunction with major US commercial bank BankProv.
Anchorage's New Ethereum Offerings
Per a new announcement, Anchorage customers, mostly institutions, who hold Ethereum can meet their cash needs without liquidating their crypto holdings. Anchorage made news earlier this year when it was granted the US first national cryptocurrency bank charter. With this latest partnership, the crypto custodian will allow institutional customers access to fiat loans on BankProv using Ether as collateral. As is expected, clients with large Ether holdings will access a much larger line of clients and vice versa.
Anchorage also provides Bitcoin-backed loans through a partnership with Silvergate Bank.
This latest service by the firm would also involve offering staking services for additional earnings such as cryptocurrency rewards and participating in on-chain governance.
Unlike banks like Silvergate, with predominantly crypto clients, BankProv has a larger set of traditional clients and is still relatively new in the crypto space.
Speaking about the Anchorage partnership, BankProv CEO Dave Mansfield said the bank plans to offer more services to the crypto community. Mansfield said,
“We firmly believe in our mission that the crypto market should be afforded the same access and rights to traditional financing tools as any other legal, well-capitalized and compliant business in America. Anchorage's collateral management tech is world-class, making them a trusted partner in the banking industry.”
Formerly known as The Provident Bank, BankProv is a subsidiary of Provident Bancorp, Inc. It is the tenth oldest bank in America, operating for over 200 years.
Increasing Institutional Interest In Ethereum
Due to its status as the largest cryptocurrency, institutions have always favored Bitcoin more while overlooking Ethereum. However, all that is starting to change with the likes of CME Group introducing Ether futures due to growing demand by investors. Banks and crypto lending platforms have been pushing Bitcoin-backed loans for some time, but only recently did Ethereum backed loans start becoming a thing. Platforms like BlockFi are among the few that offer several crypto-backed loans, including Bitcoin and Ether loans. Abra is another crypto company that offers crypto-collateralized loans to its clients.