Signature Bank Already Beat JPMorgan in Creating a Blockchain Coin via Its Signet System Nearly 2 Months Ago
There’s been a lot of buzz around the recent decision that JPMorgan Chase CEO Jamie Dimon took on to offer a blockchain-based digital asset. The concept has been rife with controversy, with many publications saying that it should not even be considered a real cryptocurrency.
Even with all of this publicity, Signature Bank actually already offers this type of asset, and it has been available for over two months.
The Signet system through Signature bank has already brought in over 100 clients to use the program, and millions of dollars are going through the system each day. Joseph J. DePaolo, the CEO and president of Signature Bank, said,
“We can say there are trades going on in the millions some days and tens of millions other days and I would say the number of clients we have is in the triple digits.”
Right now, there are very few banks in the United States that make it possible to offer deposit accounts to crypto startups, thought Signature is included in that collection. Also included in that small group is Metropolitan Bank and Silvergate Bank, which are located in New York and San Diego respectively.
There are many non-crypto businesses that are looking to add Signet to their own infrastructure, even though the first to adopt it were based in the crypto industry. American PowerNet, an electrical power trading firm, integrated Signet as their payments platform for customers. However, there are two “ecosystems” that require fast movement of funds and/or property.
The CEO stated, “We will shortly onboard a substantial cargo ecosystem and wholesale diamonds.” However, the names of the organizations were not provided. He added that the bank was presently debating a partnership with a title insurance company as well, commenting, “If you’ve ever been involved in a commercial real estate closing, usually all the lawyers are sitting around eating lunch waiting for the wire transfer.”
Signature Bank is in charge of managing $45 billion in assets, even though they are a miniscule fraction of JPMorgan. That may be way chairman of Signature, Scott Shay, seemed to be proud of the similarity between their own asset and the JPM Coin from JPMorgan. Both the blockchain system at Signature and the JPM Coin rude on private Ethereum technology.
The Signet platform is a proprietary blockchain, while JPM Coin uses Quorum, a data privacy-oriented fork of the Ethereum public blockchain code.
Another common factor between these two individual assets is the use of stablecoins, because the value of the asset is linked directly to the dollar at a one-to-one ratio. Overall, with these traits, JPM Coin hopes to eventually eliminate wire transfers, opting for a blockchain ledger instead, which is basically what Silvergate Bank offers in the SEN system, but with crypto compatibility.
Shay commented that there are multiple uses that Signet can be a part of that sets it apart significantly from JPM Coin. He said,
“If you happen to be an exchange [SEN] is useful, but we developed Signet to be tailored to a wide variety of industries. It’s not crypto exchange-focused.”
Shay added that Signet did not need approval from the New York State Department of Financial Services (NYDFS), because it already had it. JPMorgan, on the other hand, said,
“We will actively engage our regulators to explain its design and solicit their feedback and any necessary approvals.”
Taking a small jab at JPM Coin’s lack of progress, Shay concluded, “The difference is we are actually out there doing this.”