Outside Source
On Oct. 18, Silvergate Capital, a crypto-fiat gateway network designed for financial institutions, announced its financial results for Q3 2022.
The bank, known for services such as processing consumer fiat deposits to cryptocurrency exchanges, saw thetransfer volume on the Silvergate Exchange Network plummet close to $50 billion compared to Q3 2021. Silvergate handled $112.6 billion of such transfers in Q3 2022.
It appears that investors were less than satisfied with the results. Silvergate’s share price, as listed on the U.S. NASDAQ exchange, fell by close to 22% at the time of publication after the results were announced.
In addition, Alan Lane, Silvergate’s president and CEO, said in an earnings call with investors that the company would likely “miss its goal” of launching a stablecoin pegged to the U.S. dollar this year, citing ongoing regulatory compliance work. Earlier this year, Silvergate acquired Facebook’s (now Meta) former stablecoin project Diem. The company plans to integrate the Diem stablecoin into its own SEN technology.
Interestingly, the company’s profits actually surged 84% year-over-year to $43.328 million. This is because the bank relies on interest earned from its digital asset customers’ deposits, which stood at $13.2 billion in Q3. Over the past 12 months, the U.S. Federal Reserve has increased the benchmark Fed Funds Rate from 0.00% to 0.25% last September to 2.25% to 2.50% in Septembe 2022. Correspondingly, the average interest earned on Silvergate’s custodied assets increased from 1.27% in Q3 2021 to 2.58% in Q3 2022.
With regard to the results, CEO Alan Lane stated:
“While volumes on the Silvergate Exchange Network (SEN) decreased this quarter compared to the overall industry, we remain confident in the power of our platform and the opportunities for expansion within the network. We continued to see demand for our SEN Leverage product and growth in our new customer pipeline.”
This article first appeared at Cointelegraph.com News
