Reportedly, Signature Bank, a New-York based commercial bank, is in the process of launching a payments platform powered by Permissioned Ethereum blockchain for its institutional clients. The platform will be known as Signet Platform and will allow Signature Bank clients to move their funds within 30 seconds 24 X 7 by converting USD to Ethereum ERC-20.
The platform is developed in collaboration with trueDigital Holdings in New York. However, this platform, as of now, is available only to Signature customers and is designed with an aim to connect the third parties with the bank without any intermediary.
Signature Bank was launched in May 2001, and has generated a net income of $155.4 million for the third quarter of this year, and deals with $45 billion in assets.
How Does the Signet Platform Work?
Traditionally, the corporate payments were facilitated using the Swift Interbank Platform or the Automated Clearing House (ACH) network. This, on an average, could take three days and service is unavailable during the weekends which made it tough for the customers.
Thus, with this early implementation, Signature Bank plans to get over this limitation. As of now, only the Signature customers can avail the functionality, but the chances are high that bank might be making an effort to let the others connect to them without needing an intermediary as well.
The co-founder and CEO of Signature Bank sees this as necessary and said:
“We have to do this, otherwise we’re not going to exist. If you’re not involved in blockchain, in five years, you won’t be around as a bank.”
However, the signets (Signature Bank’s digitized dollars) can only work on Signet Platform, which is different from other Ethereum or Ethereum’s ERC-20 tokens. Also, they don’t operate with other exchanges and services.
The platform will be made available to the commercial clients of the bank starting January 1, 2019, at 12.01 am ET. The transactions will be free at the time of launch, however, clients should maintain a minimum balance of $250,000.
What’s more? The amount held within the Signet Platform will be eligible for FDIC insurance. Additionally, since the platform is made accessible only to Signature Bank’s clients, it is necessary that customers must comply with know-your-customer and anti-money-laundering acts.
As more news pour in, the Signet Platform has also received approval by the New York State Department of Financial Services. This makes Signature the first bank to obtain such regulatory permission allowing the use of blockchain in this capacity.
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