Fidelity Partners with Silvergate to Offer Bitcoin-Collateralized Loans

Fidelity Digital Assets, a subsidiary of the Boston-headquartered mutual fund behemoth, has partnered with crypto-friendly bank Silvergate Capital to offer Bitcoin-collateralized fiat loans to institutional investors, according to its March 29 press release.

Bitcoin secured by Fidelity’s custody business can be used as collateral for loaning U.S. dollars from Silvergate via its lending product called SEN Leverage.

Silvergate’s Jon Melton says investors will now have better access to capital because of the new partnership:  

With Fidelity Digital Assets on board, we’re combining our exceptional lending program with a leading custody services platform, providing investors with greater access to capital.

SEN Leverage saw its volume grow to $82.5 million by the end of the fourth quarter.

Trailblazing companies

Silvergate started accepting cryptocurrency exchanges as its clients as early as 2013 when it was deemed to be a huge reputational risk before. It went on to become the go-to destination for industry startups.

Fidelity began dabbling in cryptocurrency mining back in 2014 before establishing the subsidiary that is specifically focused on digital assets in 2018.

Two years ago, Fidelity also rolled out its cryptocurrency custody business, which CEO Abigail Johnson described as “incredibly successful” during her rare interview in December.       
Last week, Fidelity also filed with the U.S. Securities and Exchange Commission for launching a Bitcoin exchange-traded fund, joining a cadre of institutional players that want to achieve a similar feat.    



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