Silvergate Capital Corporation , the leading provider of innovative financial infrastructure solutions to the digital currency industry, today announced Fidelity Digital Assets, a leading institutional focused execution and custody services platform provider, as a custodian for SEN Leverage. SEN Leverage provides secure, institutional-grade access to capital through U.S. dollar loans collateralized by bitcoin.
Using SEN Leverage, institutional investors receive USD financing by entering into a loan agreement with Silvergate Bank, and Silvergate uses its proprietary payments network, Silvergate Exchange Network (“SEN”), to fund the loans. The investor’s collateral – bitcoin – is held by Fidelity Digital Assets in a separate, secure cold storage account.
“Silvergate is well positioned to offer SEN Leverage due to our lending authority and strong credit culture,” said Jon Melton, director of digital asset lending at Silvergate. “With Fidelity Digital Assets on board, we’re combining our exceptional lending program with a leading custody services platform, providing investors with greater access to capital.”
The initiative enables institutional investors who currently custody their bitcoin with Fidelity Digital Assets 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.
“Like Silvergate, we recognize the opportunity to create a more seamless investor experience by helping institutions maximize capital efficiency, as well as the opportunity to strengthen the digital assets ecosystem through greater integration and collaborations like this,” said Christine Sandler, head of sales and marketing at Fidelity Digital Assets. “The ability to access SEN Leverage while maintaining stability of assets on our custody platform will help us deliver even more value and more choice to our clients to meet their evolving needs.”
Silvergate made SEN Leverage a full product offering in Q4 2020 and saw loan volume increase from $35.5MM in Q3 2020 to $82.5MM at the end of Q4. The robust lending product continues to grow its contribution to the overall success of the Silvergate banking platform.