YouSaid · the spoken record

Alan Lane

lines on the record: 42
first: 2022-06-02
most recent: 2022-06-02
sittings or episodes: 1
sources: podcast

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“Yeah, I really appreciate the opportunity. I'm happy to come back anytime. I absolutely love this space and appreciate all the work that you guys are doing.”
2022-06-02 · Odd Lots · Silvergate CEO Alan Lane On the Business of Stablecoin · IDENTIFIED FROM THE TRANSCRIPT · source
“What if we were to issue our own? How do you view Tether? And they use Tether because it works. And so unless and until there is a run that actually causes them to burn through all their cash and then their securities and then theoretically their commercial paper and, you know, it just works. And there are, by the way, also use cases that I've heard of where people in other countries who want to hold US dollars because they might be in a country that is experiencing hyperinflation. They're comfortable, and these are consumer folks. They are comfortable holding Tether as a dollar proxy. And I don't know how widespread that is, but I've certainly heard that.”
2022-06-02 · Odd Lots · Silvergate CEO Alan Lane On the Business of Stablecoin · IDENTIFIED FROM THE TRANSCRIPT · source
“So unfortunately, my knowledge is limited just as the rest of the world's knowledge is limited because we don't bank them, as I mentioned. But what I can tell you is that our customers who use Tether, we have customers all over the world. We have customers in Europe and Asia and Latin America. those customers that use Tether do not have the same concern that I hear that you just articulated. And so there's clearly a difference in perception between those who are inside the ecosystem and those who are outside of it. Now, I don't know why that is, Tracy. But I do know that when we talk to our customers, because we've asked them, you know, what if we were to issue our own? This goes back obviously like 2000.”
2022-06-02 · Odd Lots · Silvergate CEO Alan Lane On the Business of Stablecoin · IDENTIFIED FROM THE TRANSCRIPT · source
“But they don't have the ability to pay for things. And so I just view a tokenized dollar as a way to take some portion of your value that whether you have it sitting in a bank account or whether you have it sitting in Bitcoin. Pull that out, put it in a digital wallet on your phone so that you can use it to pay for things, whether that be an online merchant, whether that be at a physical merchant. And so that's that. And to me, that shouldn't create any concern about financial contagion and runs on the bank and all of that stuff because it's no different than withdrawing cash out of an ATM.”
2022-06-02 · Odd Lots · Silvergate CEO Alan Lane On the Business of Stablecoin · IDENTIFIED FROM THE TRANSCRIPT · source
“Right now, on my iPhone, I have both the Dunkin' Donuts app and the Starbucks app. And I can load both of those with value, but guess what? It's not interoperable. I can't pull it back off. And I can't take my Dunkin' Donuts app and pay for a coffee at Starbucks. And so what we see, and this is a longer view, and it's going to take a while to get there, but everything in the world is moving digital. And people say, well, money is digital too. And that's true for all of us in the first world, but there are many people that don't have access. They all have phones.”
2022-06-02 · Odd Lots · Silvergate CEO Alan Lane On the Business of Stablecoin · IDENTIFIED FROM THE TRANSCRIPT · source
“It's not FDIC insured. I can take it anywhere and I can use it to pay for something. But importantly, I didn't withdraw all my money out of the bank. I only withdrew what I needed to transact. So I think that that is the place for a Silvergate issued tokenized dollar. And we've also started talking about it internally. And we're beginning to talk with our regulators about this as well. We're getting away from Colin or Stablecoin because obviously stablecoins have a really bad name because they've proven themselves to not be stable in many cases. But for us, we're looking at this as, hey, this is a tokenized dollar.”
2022-06-02 · Odd Lots · Silvergate CEO Alan Lane On the Business of Stablecoin · IDENTIFIED FROM THE TRANSCRIPT · source
“Et cetera, which is candidly one of the reasons that we think from our perspective, and I'm not, hey, I'm a free markets guy. Clearly USDC has found product market fit, right? I mean, they didn't, you know, they weren't sitting in their garage trying to come up with something they hoped that the industry would use. They launched something and the industry has said yes and they're speaking with their wallets and there's over $50 billion of backing USDC right now. What we see is that there is a need for a tokenized dollar to be used by consumers to pay for things. And the way, and I know I'm getting”
2022-06-02 · Odd Lots · Silvergate CEO Alan Lane On the Business of Stablecoin · IDENTIFIED FROM THE TRANSCRIPT · source
“I certainly think that's one of the things that the regulators are concerned about. And that's, you know, if you go back and look at the president's working group report that I've referenced a couple times already, there are concerns about contagion and points of liquidity stress.”
2022-06-02 · Odd Lots · Silvergate CEO Alan Lane On the Business of Stablecoin · IDENTIFIED FROM THE TRANSCRIPT · source
“They're going to set it in reserve, but they might pass through us on their way. One of the things, I mean, we've been managing liquidity this way since we launched the Sen in 2017. Back at that time, believe it or not, we were a $2 billion bank and we had a billion dollars in crypto related deposits. We were holding almost all of that at the time at the Federal Reserve because when you're going through these times of liquidity and stress, you want to make sure that you're not investing those funds into something that's more long-term because you don't know how sticky it's going to be.”
2022-06-02 · Odd Lots · Silvergate CEO Alan Lane On the Business of Stablecoin · IDENTIFIED FROM THE TRANSCRIPT · source
“Investor call last week. I referred folks on that call back to our earnings transcript at the end of the first quarter of 2020. If you remember back at that time, you know, pandemic hit, markets were crazy, you know, Bitcoin sold off. You know, the crypto markets were selling off as well. And what we saw back at that time was a surge in our deposits, and we reported on that because it was quarter rend. We said, look, our deposits are elevated at quarter end. We believe that's temporary. And by the time we released our earnings the third week of April, we were already seeing deposits kind of normalize and we reported on that fact. But critically, we are this critical piece of infrastructure where folks, as they're exiting the ecosystem or wanting to go to cash, those dollars pass through Silvergate and then end up wherever they're going to put them. Sometimes it just ends up at USDC, in which case those dollars aren't going to sit at Silvergate.”
2022-06-02 · Odd Lots · Silvergate CEO Alan Lane On the Business of Stablecoin · IDENTIFIED FROM THE TRANSCRIPT · source
“What I could say about the way we're set up at Silvergate is because we are not the bank that is holding like the reserves. We technically don't want to be their primary bank in the sense that where I've spent most of my career as a business banker, the idea is, well, gosh, let's get the operating deposits. Let's make them a loan, you know, let's get the full relationship. We take a very narrow view here, which is, you know, don't keep with us excess deposits that are needed for other things because we are primarily a liquidity source. And so what that means, Tracy, is that when there's this type of activity, we see a lot of money going through our bank, but we actually see our deposits. I talked about this on a”
2022-06-02 · Odd Lots · Silvergate CEO Alan Lane On the Business of Stablecoin · IDENTIFIED FROM THE TRANSCRIPT · source
“To fund our lending activities. And so if you were to look at some of the other banks that are banking the space and what are they doing with the deposits, I think they're primarily using those in some of their lending operations. And again, their banks, that's what they do. We have decided that the industry is relying on us as critical infrastructure to provide liquidity. And when Terra was melting down, obviously we didn't have any exposure whatsoever to Terra, but that contagion, if you will, that was spreading throughout the ecosystem and causing people to go to cash or go to stablecoin or go to a dollar-backed stablecoin, you can imagine that we might have seen heightened activity across our platform and the industry relies on us for that critical function.”
2022-06-02 · Odd Lots · Silvergate CEO Alan Lane On the Business of Stablecoin · IDENTIFIED FROM THE TRANSCRIPT · source
“On our deposits, and we don't, and we actually encourage our customers to only keep as much at Silvergate as that they need for their trading and investing activities. You mentioned, Joe, that we don't hold all the reserves for USDC, for instance. USDC is over $50 billion. We're only a $15 billion bank, and we have 1,500 customers. So obviously, we don't have the majority of those dollars. Spread elsewhere in the banking system. And there is other banks that have obviously since we've got into the space or other banks that are banking this crypto space. And candidly, I think what they're doing with the deposits, and this is not criticism, this is just a factual statement, they are doing what we did back in 2014, which we looked at this and we thought, heck, this is a potential source of deposits.”
2022-06-02 · Odd Lots · Silvergate CEO Alan Lane On the Business of Stablecoin · IDENTIFIED FROM THE TRANSCRIPT · source
“We have a very large investment securities portfolio. So on $15 billion in assets, we probably have $12 billion in investment securities. I already mentioned with the collateralized Bitcoin lending, we have about a billion dollars. But the overwhelming majority of our balance sheet is in investment securities. Now they're not all treasuries, but they importantly, they all trade actively, the types of securities that we buy as a bank, we can trade out of those on any given day. Obviously, if they're longer in duration and interest rates have gone up, then we're going to have to take a haircut. But we do look at this, and this is one of the reasons we don't pay interest.”
2022-06-02 · Odd Lots · Silvergate CEO Alan Lane On the Business of Stablecoin · IDENTIFIED FROM THE TRANSCRIPT · source
“Yep, yep, great question. And we think a lot about this because candidly we treat SEN and so we have, I don't think I've mentioned this yet, but we have over 1,500 institutional customers at Silvergate in this initiative who are using the SEN every day. And as an example in the first quarter of this year, we had 142 billion dollars. So we're about $15, $16 billion bank in terms of total assets. We had $142 billion move across the SEN in the first quarter of this year alone. That was actually down quite a bit from the fourth quarter. And as you know, cryptocurrency trading was down. But in the fourth quarter, we had over 200 billion. And so what that means is that we have to stay liquid. There's different definitions of liquidity, right? The way we define it is that”
2022-06-02 · Odd Lots · Silvergate CEO Alan Lane On the Business of Stablecoin · IDENTIFIED FROM THE TRANSCRIPT · source
“We'll issue it ourselves. And so that's what we bought in January. So we bought the protocol itself, which is open source. And some folks have said, well, gosh, what did you really buy? Because isn't this open source? It's absolutely open source. And we think it needs to be. People need to be able to look at the blockchain just as we looked at the blockchain back in 2014 when we were looking at Bitcoin transactions because we wanted to verify that leg of the transaction. So it's open source, but importantly there are proprietary regulatory compliance elements that have been built on top of it to satisfy that the know your customer, the anti-money laundering, the BSA requirements. So buying all of that together in furtherance of then us being able to issue our own stablecoin. And again, for the use of payments and remittance and not for a cryptocurrency use case.”
2022-06-02 · Odd Lots · Silvergate CEO Alan Lane On the Business of Stablecoin · IDENTIFIED FROM THE TRANSCRIPT · source
“One thing I can say with confidence is they didn't spend Facebook, who was the initiator of this, they didn't spend two or three years millions and millions of dollars with some of the best software engineers in the world. They didn't build this technology to turn around and sell it to somebody else. But yet that's where they found themselves. And so we looked at that. We had been ready to go. We had done all that work to integrate with them. And so we looked at the tech and we said, you know, this is actually purpose built for payments. They had some of the best technologists in the world building it. They had a lot of digital first retail platforms ready to engage with it to start offering it to their retail customers. And so let's see if we can acquire this technology. And then we'll just come back to where we were a couple years ago.”
2022-06-02 · Odd Lots · Silvergate CEO Alan Lane On the Business of Stablecoin · IDENTIFIED FROM THE TRANSCRIPT · source
“They didn't tell us, no, you can't do this in the summer. What they strongly encouraged us to wait until this guidance came out. And once the guidance was out, it was pretty clear that, man, if we had launched with DM, we would have then been operating a stablecoin that was in direct contravention of what the regulatory guidance was. And so we were glad that we hadn't moved forward at the time. And now to your question, so what did we buy? So at the same time that we read the report, the DM folks read the report. They were looking at that and we called them up and we said, well, what do you guys think? And they said, yeah, we think we're going to pause this effort. Looks like we're kind of dead in the water. My words, not theirs. And so we're going to engage strategic advisors to help us figure out what to do with this.”
2022-06-02 · Odd Lots · Silvergate CEO Alan Lane On the Business of Stablecoin · IDENTIFIED FROM THE TRANSCRIPT · source
“It clearly stated a preference for stablecoins to be inside the banking system. So we're a bank, so we can check that box. The other thing that it clearly said was there was a desire to see that these payment networks were essentially not kind of controlled by, I forget the terminology that was used, but I'll just say big tech, okay? You know, we can go back and look at the actual language. And so we looked at that guidance and then, you know, kind of breathe a sigh of relief that we had not gone ahead and launched. So to your point, Tracy.”
2022-06-02 · Odd Lots · Silvergate CEO Alan Lane On the Business of Stablecoin · IDENTIFIED FROM THE TRANSCRIPT · source
“But I could show you the presentation. It was like an eight-page or 14 page presentation. This is what Bitcoin is. And these are the types of companies that are being formed. This is the FinCEN guidance that came out last year. This is how we're thinking about banking the companies. We engaged very early with our regulators. And then over the last eight years, they've been in at least annually and most years they've come in for an interim visit to kind of look and make sure that We're doing everything appropriately. So our regulators have had a long time to go to school on the different things that we're doing. I'll just mention one other thing off topic, but we also offer loans collateralized by Bitcoin. And that was another path that we went down.”
2022-06-02 · Odd Lots · Silvergate CEO Alan Lane On the Business of Stablecoin · IDENTIFIED FROM THE TRANSCRIPT · source
“These customers such as second market at the time, but we were confident that we understood how the existing regulations applied to that activity. So, you know, there had been FinCEN guidance issued in 2013. There was clear guidance for how a banks should interact with the money service business. So, but what we did was we applied these existing regulations to the activity that these customers were engaging in. And then we invited our regulators into our offices in the summer of 2014. And we gave them a Bitcoin tutorial. Not to be unfair to them, but Bitcoin was brand new. And in 2014, when I asked the question, so it was the state banking department and the Fed, and I asked the question if they had heard of Bitcoin. And they were thinking about it. Well, is that kind of like, you know, banking marijuana companies? So it was kind of all, you know, it was very unclear.”
2022-06-02 · Odd Lots · Silvergate CEO Alan Lane On the Business of Stablecoin · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, Tracy, it's a fair question. And at times some of our investors have asked us the same question. Well, why don't you just launch something? Well, I think there's a big difference between a regulated bank that is already operating under the supervision of and under the authority of these regulators, these different regulatory agencies versus a tech startup that's going to spend something up and launch it into the market. But to your question of what's it been like, our regulators have really come up the learning curve. I mean, we've been doing this now, as I mentioned, for eight years. And just to go back for just a second, in 2014, we did a version of what you're suggesting, obviously at a very small scale, but we started opening accounts for these.”
2022-06-02 · Odd Lots · Silvergate CEO Alan Lane On the Business of Stablecoin · IDENTIFIED FROM THE TRANSCRIPT · source
“As is now somewhat ancient history, there's a president's working group of regulators. It's called the President's Working Group. It's the U.S. Treasury, the Federal Reserve, the SEC, and the CFTC. And they've been looking at this question of stablecoins. They were doing some work last year to address the potential regulation for stablecoins. And so we were strongly encouraged to wait and to not launch last summer and to wait for that work to be done. And that report was issued on November 1st of last year.”
2022-06-02 · Odd Lots · Silvergate CEO Alan Lane On the Business of Stablecoin · IDENTIFIED FROM THE TRANSCRIPT · source
“Wouldn't this be interesting to be able to unlock the ability for people all over the world to have a tokenized dollar in an app on their phone that they could use to pay for things? And that would be interoperable. And so that was our thesis going in. And so we said, yeah, we'd absolutely like to be a part of this. As we worked with the DM Association over the first six months of 2021, it got to the point where they abandoned that multi-bank kind of approach. And we agreed and we announced in May of last year, May of 2021, that Silvergate was going to be the exclusive issuer of the DMUS dollar. And so that was at the time a big deal for us. And obviously we thought that we saw a path to us participating and partnering with them to issue the DMUSD. Unfortunately,”
2022-06-02 · Odd Lots · Silvergate CEO Alan Lane On the Business of Stablecoin · IDENTIFIED FROM THE TRANSCRIPT · source
“But none of those banks really had the capability that Silvergate has developed to be able to interact with the technology minting and burning and all of that. So what we looked at at that time was, well, this is a completely separate use case from what we had been contemplating. To go back to what I was saying a minute ago, we were contemplating potentially issuing a stable coin because we saw the value in helping our customers have a dollar token that could be used in the crypto ecosystem. But what the DM association was trying to do was really take this concept of a tokenized dollar to be able to use it for commerce, for payments, for remittance, not cryptocurrency trading. And that was fascinating to us. And again, right at that intersection of, hey, we're a bank's participate in payment systems and wouldn't this”
2022-06-02 · Odd Lots · Silvergate CEO Alan Lane On the Business of Stablecoin · IDENTIFIED FROM THE TRANSCRIPT · source
“We do believe it is legally permissible. And we were getting ready to, as they say, go to Washington and talk about this back in March of 2020 right as the pandemic hit. And so obviously everybody's priorities shifted a little bit. And so we cooled our heels in the first and second quarter of 2020, but we were still working on the idea. And it was late 2020 where we actually were approached by the DM Association and they wanted to talk with us because they were familiar with our ability to mint and burn tokens. And at the time, they were working with four other banks. I don't know who those banks were, but four other large banks. And the concept was these four banks were going to hold the reserves, but each of them was going to hold 25% of the dollars backing these tokens. So you're going to have this broad array of banks holding the reserves.”
2022-06-02 · Odd Lots · Silvergate CEO Alan Lane On the Business of Stablecoin · IDENTIFIED FROM THE TRANSCRIPT · source
“And we were looking at the pros and cons of whether or not we should issue our own. Why would we do that? the thought process was well we've we've got this send the silvergate exchange networks so a lot of our customers are using the send to transact dollars 24-7 but that's not on a blockchain it doesn't candidly it doesn't need to be to do an intrabank transfer but if they want to take their dollars outside of Silvergate well then oftentimes what they were doing was they were starting on the send they were then buying a you know USDC and then taking that USDC to places where they didn't have a Silvergate bank account, for instance. And so we started thinking about whether or not we should issue our own. We did the legal permissibility analysis. We believe that it's legally permissible for us to issue a stable coin. We have not actually heard anything to the contrary and all the conversations we've had with our regulators.”
2022-06-02 · Odd Lots · Silvergate CEO Alan Lane On the Business of Stablecoin · IDENTIFIED FROM THE TRANSCRIPT · source
“US dollar back token that you know if you just stop and think about what I just said that's going to be problematic a Swiss entity issuing a US dollar back token. And so there are a lot of challenges, but at the end of the day what we saw as the opportunity, and I should mention we were not involved with Facebook at all during any of that. We ended up coming on the scenes late, so they had, as you'll know, just remind you that they started out as Libra. They then switched the name to DM. They then moved to at some point in that, they moved from the US to Switzerland. And during that entire time, we at Silvergate were looking at the feasibility of issuing our own stable coin. So we were already banking USDC and some of the other early entrants.”
2022-06-02 · Odd Lots · Silvergate CEO Alan Lane On the Business of Stablecoin · IDENTIFIED FROM THE TRANSCRIPT · source
“Why it didn't work. Unfortunately, I think it's because it was Facebook. I will say early on, I think they not only kind of raised the ire of the US government, but of a lot of governments when they announced that they were going to issue this and make it a backed by a basket of currencies. So it's like, well, let's not only upset the U.S. government, but let's upset all of these other sovereign nations who are issuing their own currencies and let's make it a basket. So I think they quickly realized that it needed to be backed by a single currency. Unfortunately, by that time, I think they were just in the crosshairs. And no matter what they did, they tried to move offshore. They were a Swiss entity for a while trying to issue a”
2022-06-02 · Odd Lots · Silvergate CEO Alan Lane On the Business of Stablecoin · IDENTIFIED FROM THE TRANSCRIPT · source
“True innovation, in my opinion, but it's not going to displace governments, sovereign governments' desire to issue their own currencies. And so I view Bitcoin as, you know, you guys are very familiar with the meme, digital gold. You know, it is a way to save a portion of your wealth. And I think that we still need to operate in the financial world with fiat currencies, the world that we actually live in. And just like some people might try to save some of their wealth in gold or in some other stocks and bonds, et cetera, I think Bitcoin is certainly an alternative, but I don't think it's going to replace the dollar. And so I actually think Silvergate is perfectly positioned to kind of have a foot in both ecosystems.”
2022-06-02 · Odd Lots · Silvergate CEO Alan Lane On the Business of Stablecoin · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, so again, an important distinction though would be that these entities that we're banking aren't operating outside of regulations. So that would be the first thing I would say. But to the broader kind of fundamental question, I distinctly remember when I was talking with our team internally about this back in 2013. And this meme was Bierolen Benick. And my thought process was, well, if this takes off, you know, it's going to take years. It's going to take decades. I've been in banking for 40 years. So I've seen all the different things. I mean, I was there right as regue was being repealed, which limited the amount of interest that you could pay on deposits. I was there when the first ATMs were being installed. So I've seen all of this quote unquote innovation. Bitcoin is.”
2022-06-02 · Odd Lots · Silvergate CEO Alan Lane On the Business of Stablecoin · IDENTIFIED FROM THE TRANSCRIPT · source
“From this customer. And at that point, Circle knows we have the dollars in our possession. So they turn around and they mint the USDC token and send it to the wallet address of that institution that is looking to purchase the USDC. And then the same thing happens in reverse. So if someone wants to redeem their USDC and go back to US dollars, they send the USDC to the wallet at Circle Circle at that point once they have possession of the USDC, they then send an instruction to us via API, and we then in turn will send the dollars back to that prior USDC token holder.”
2022-06-02 · Odd Lots · Silvergate CEO Alan Lane On the Business of Stablecoin · IDENTIFIED FROM THE TRANSCRIPT · source
“For the Pax dollar, which is issued by Paxos, for the Gemini dollar issued by Gemini, and for True USD, they use the SAN and our API for the minting and burning of their tokens. So those tokens are issued when a dollar hits their Silvergate bank account. And it's all programmatic. And so if somebody wants to purchase USDC from Circle, what they would do is they would send dollars into Circles bank account at Silvergate. And when those dollars hit the bank account, then at that moment there is an API call from Silvergate to Circle that says, we just received X amount of dollars.”
2022-06-02 · Odd Lots · Silvergate CEO Alan Lane On the Business of Stablecoin · IDENTIFIED FROM THE TRANSCRIPT · source
“So they use the SEN and our API for the important, you know, that on-ramp and off-ramp. I've often tried to just describe what we do as, hey, we are the regulated on-ramp from the US dollar and other fiat currencies into the Bitcoin and digital asset market. And then likewise, we are the off-ramp from that digital asset market back into fiat currencies. And the way that's done, and so let's talk about the stablecoins, the stablecoin issuers who use our platform. So they are all of the regulated U.S. dollar backed stablecoin issuers. And by that distinction, I heard in your opening remarks, you were distinguishing between the different types of stablecoins, the dollar-backed ones. Are the only ones we back, so we don't bank the algorithmic stablecoin offerings, nor do we these other stablecoins that are maybe.”
2022-06-02 · Odd Lots · Silvergate CEO Alan Lane On the Business of Stablecoin · IDENTIFIED FROM THE TRANSCRIPT · source
“Seven days a week. It is only fiat currency, though, and that's another important distinction, especially as we move to the stablecoin topic, because our customers are dealing with US dollars and now euros. We launched the EuroSen platform back in February so that we can provide this service over in Europe as well. But it is a 24-7 API enabled connection so that our customers can move US dollars amongst themselves around the ecosystem anytime of the day or night. We launched this back in 2017, and it was really a game changer for the industry and for Silvergate because we were the first bank in the world to actually bring this, the legacy banking system that only operates 40 hours a week Monday through Friday into the 24-7 digital asset market that trades around the clock around.”
2022-06-02 · Odd Lots · Silvergate CEO Alan Lane On the Business of Stablecoin · IDENTIFIED FROM THE TRANSCRIPT · source
“And what that is it is a two sided network where we connect digital asset exchange platforms such as Coinbase and Gemini and Kraken and FTX. And as soon as I start naming them, I'm worried I'm going to leave somebody out. We've got all of them, all of the major ones. Anybody that is serious about regulation, and that's an important distinction because they have to satisfy not only their own legal and regulatory requirements, but then we have to verify that their compliance programs are sound. So that's one side of the network. And then on the other side of the network is institutional investors, other folks who are providing access to Bitcoin and other digital assets, and we connect them across our platform so that they can interact 24 hours a day.”
2022-06-02 · Odd Lots · Silvergate CEO Alan Lane On the Business of Stablecoin · IDENTIFIED FROM THE TRANSCRIPT · source
“Southern California was actually asking for blockchain addresses. And I think we have a pretty deep understanding of this ecosystem to now get to the point of the story around stablecoin. You first have to understand what is Silvergate known for today. And that is a platform. It's a global payments platform that is referred to as the SEN, which is an acronym S-E-N. It stands for the Silvergate Exchange Network.”
2022-06-02 · Odd Lots · Silvergate CEO Alan Lane On the Business of Stablecoin · IDENTIFIED FROM THE TRANSCRIPT · source
“Early. So because we needed to satisfy ourselves and our regulators that we knew what was the use of proceeds, what was this money being used for? These businesses are deemed to be money service businesses. And so what we would do is when Genesis then called second market would actually try to transact on behalf of a customer. So one of their customers wanted to buy or sell Bitcoin. And that meant that they were sending a wire transfer across our platform. We asked at the time, okay, give us the Bitcoin address for this transaction. And what we wanted to see on the blockchain was if someone was sent in $100,000 to buy or sell Bitcoin, we wanted to go out to the blockchain and see that there was, in fact, a transaction that represented $100,000 of value. And I think at the time, second market was somewhat amazed that this bank.”
2022-06-02 · Odd Lots · Silvergate CEO Alan Lane On the Business of Stablecoin · IDENTIFIED FROM THE TRANSCRIPT · source
“There you go. That's probably every Bitcoiner's thought, no matter when you get in. But the fact of the matter is once we got into the ecosystem and we were trying to help our customers, so the first thing we did, Tracy, is we were just a bank willing to talk to these new companies. And I should mention right up front, Silvergate is institutionally focused. So we do not bank consumers directly. So this is an important distinction because many of our customers provide services to consumers, but we are an institutionally focused bank. And so we were opening bank accounts for businesses who were providing services to the Bitcoin ecosystem. And what did that look like back in 2014? Well, it looked like Genesis, which at the time was still called second market, they were enabling some of their customers to buy and sell Bitcoin. And we went deep on this.”
2022-06-02 · Odd Lots · Silvergate CEO Alan Lane On the Business of Stablecoin · IDENTIFIED FROM THE TRANSCRIPT · source
“Go back briefly to our entrance into the space. And it was really preceded by intellectual curiosity on my behalf personally. I was looking at Bitcoin.”
2022-06-02 · Odd Lots · Silvergate CEO Alan Lane On the Business of Stablecoin · IDENTIFIED FROM THE TRANSCRIPT · source
“Really focused on this new digital asset called Bitcoin and some of the companies that were being formed at the time to provide services to this budding Bitcoin space. And many of them were struggling to find and maintain bank accounts. And so that was really where we started. We've obviously evolved quite a bit over the last eight years and happy to talk a little bit about that. But I don't want to derail the stablecoin conversation.”
2022-06-02 · Odd Lots · Silvergate CEO Alan Lane On the Business of Stablecoin · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, as a regulated financial institution, Silvergate is a California State Chartered Bank. We are a member of the Federal Reserve. Our deposits are insured by the FDIC. And so we're very interested in the stability of the US dollar and making sure that anytime any of our customers show up, that they can get their dollars back out. And so you're absolutely right. I heard in your introductory comments that we've been banking this ecosystem since January of 2014, which is an important data point because back then it was Bitcoin only. And so we entered the space.”
2022-06-02 · Odd Lots · Silvergate CEO Alan Lane On the Business of Stablecoin · IDENTIFIED FROM THE TRANSCRIPT · source