On December 6, we reported that New York’s Department of Financial Services (DFS) has approved the processing of payments on a Blockchain-based platform owned by Signature Bank. In line with that report, the financial institution is now using the Ethereum Blockchain as a payment solution for its clients.
Signature Bank Partners With TrueDigital Holdings LLC
The Commercial Bank is partnering with TrueDigital Holdings LLC, a New York-based global financial technology firm. They are both developing a platform where the Bank’s customers will be able to transfer money in real-time. It is not limited to the time of the day and as such, there are no limitations to where or when payments can be made.
The platform to be used is called Signet and it is based on Ethereum Blockchain. This system converts US dollars to ERC-20 tokens which can then be used to send and receive money. The Bank has noted that it will ensure payments are traceable and faster. Also, every transaction is carried out securely, which makes the customer’s funds to be protected at all times.
The Only Bank Approved to Use a Decentralized Platform
Signature Bank is the only financial institution to be approved to run a decentralized platform for its customers. But then, there are expectations that in future, the bank may connect other banks to Signet so that they can offer the same services. It can also be recalled that several regulations were outlined for the Bank to follow and any other organization that will use the platform may have to follow suit.
DePaolo, Signature Bank’s co-founder in a statement said, this was a necessary course of action. This is because the Bank will fail to exist if they do not adopt Blockchain technology in its processes. According to him, any Bank that does not use Blockchain within the next five years may have the difficulty of operation. This is because they have not met the trends with technology.
Financial Institutions Are Gradually Adopting Blockchain Technology
Financial institutions all over the world are gradually adopting Blockchain technology to enhance their processes. Two Banks in Latin America recently launched a Blockchain-based platform to issue loans to customers. These loans can be processed faster and the platform helps to minimize the legal cost that is usually involved
Helio Lending, an Australian company is also accepting Bitcoin, Litecoin, Ethereum, and Ripple as collateral for loans. It shows that Helio lending is among the first companies to accept the digital asset.