Signature Bank’s Signet payment network infrastructure remains intact following its acquisition by the Federal Deposit Insurance Corporation, according to the infrastructure provider.
Despite New York-based Signature Bank being taken over by federal regulators on Sunday, Signet’s blockchain builder Tassat has confirmed that Tassat’s technology remains intact. Custody provider Fireblocks said the network was unaffected on its side.
Signet stays on, but industry moves elsewhere
Citing an unnamed source, CoinDesk said that Signature clients can still use the network with the bank the FDIC uses to provide customer deposits, Signature Bridge Bank. Greg Carmichael, CEO of Signature Bridge Bank, stressed that former Signature Bank customers can access loans, deposits and banking services without revealing their status at Signet.
An anonymous source told Bloomberg that Signet processed the transaction for his firm on March 14, 2023.
Circle CEO Jeremy Allaire said on March 13, 2023 that the firm cannot process USDC redemptions and minting and noted that the firm would use BNY Mellon for settlements. Circle later confirmed that it would use Cross River to enable transactions during normal banking hours.
Coinbase has neither confirmed nor denied using Signet, saying it will honor USDC:USD redemptions. CENTRE, a joint venture between Coinbase and Circle, issues USDC.
Signet remains important for allowing crypto traders to trade 24/7 following the collapse of Silvergate’s exchange network. Circle relied on Signet and Signature to convert fiat to USDC and vice versa.
Silvergate announced voluntary liquidation on March 9, 2023, promising to make depositors whole. Crypto made up about 90% of deposits at Silvergate. Coinbase severed ties with the firm shortly after it moved prime depositors’ funds to Signature Bank.
According to crypto venture capitalist Nick Carter, regulators took control of Signature Bank because it deemed Signet a systemic risk to the US banking sector.
The seizure occurred despite Signatures board member Barney Frank’s claims that the bank was solvent.
New Non-Bank Crypto Payment Rail on the Horizon
BeInCrypto recently reported on the findings of a JPMorgan research report that detailed the difficulties crypto firms had in transitioning to SEN and Signet.
Soupe Ranian, CEO of fintech firm Sardines, suggested that any future payment network should be delinked from banks.
UK company BCB is one such company. It offers its BLINC network as an alternative to SEN in a limited number of currencies except the US dollar. It does not function as a bank.
Customers uses B2B private blockchain for instant B2B payments in Bancorp Bank’s CBIT token.
Coinbase CEO Brian Armstrong recently tweeted that the exchange would need to build new technologies to become a neobank.
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BeInCrypto has reached out to the company or the person involved in the story for an official statement regarding the recent development, but has yet to hear back.