Silvergate and Fidelity expand bitcoin-collateral lending

The Fidelity Investments’ digital assets division has become a custodian for Silvergate Bank’s bitcoin-collateral lending program, SEN Leverage.

According to the press release, the partnership expands the lending offering for institutional investors who custody their digital assets with Fidelity Digital Assets.

To fund the loans, the bank uses its own payments network — the Silvergate Exchange Network (SEN). The cryptocurrency collateral is held by Fidelity’s subsidiary in a secure cold-storage account.

“Using Fidelity Digital Assets, we are combining our lending program with a leading custody platform, giving investors broader access to capital,” said John Melton, Silvergate’s Director of Digital Asset Lending.

The bank launched SEN Leverage as a full-fledged product in Q4 2020. By its end, the volume of loans issued reached $82.5 million. The pilot launch of the Silvergate program occurred earlier in the year with the Bitstamp exchange.

In December announced a partnership with the lending platform BlockFi to issue loans collateralised in the leading cryptocurrency.