While JPMorgan has largely been making headlines after recently disclosing plans of rolling out what would soon become the first US bank-backed cryptocurrency for settling payment transactions, another New-York based bank, albeit smaller, has already been using blockchain technology for nearly two months for the exact same purpose.
Since launching in January, Signature Bank’s new proprietary digital payments platform Signet has so far registered over 100 clients and are already using the system for transferring millions of dollars on a daily basis, according to the bank’s president and CEO Joseph J. DePaolo.
Signature is but one of only a handful of American banks that are currently providing deposit accounts to crypto firms, among which includes Silvergate and Metropolitan Bank.
Aside from crypto startups, Signature’s clients are also comprised of other enterprises outside the crypto industry, including independent electrical power trading company American PowerNet, as well as other companies in the cargo ecosystem and wholesale diamonds, both of which will soon be on-boarded on the platform.
In addition, Signature is also currently working with a title insurance company to use Signet for facilitating real-time payments.
While Signature Bank is only roughly 2 percent the size of JPMorgan, America’s largest bank to date, the bank has notably managed to outpace the banking titan in piloting a blockchain system for its wholesale payments business.
Announced Thursday, JPMorgan’s soon-to-be-launched JPM Coin bears a number of subtle resemblance to Signature’s blockchain system, among which includes leveraging on Ethereum technology. While the Signet platform runs on an Ethereum-based proprietary blockchain, TrueDigital, JPMorgan’s JPMCoin uses Quorum, a fork of Ethereum’s public blockchain.
Another marked similarity between the two systems is that both involved the use of stablecoins, a fiat-collateralized cryptocurrency transferable between clients through a distributed ledger and redeemable on a 1:1 ratio from the financial institution with which the funds were initially deposited.
The impetus to use blockchain technology to supplant wire transfers also resembles Silvergate Bank’s main goal for launching SEN, another blockchain-based system developed for facilitating payments. What sets Signet apart, however, is its broader application to a wide variety of industries aside from crypto-related firms.
As it stands, the New York State Department of Financial Services (NYDFS) has already approved Signet, while JPMorgan is still currently working with US regulators for the approval of JPMCoin.