Cryptocurrency lending breaks into traditional banking! Century-old American bank "BankProv" launches Ethereum lending service

Ethereum is making its way into traditional bank gold purchases as digital asset bank Anchorage announced a partnership with the long-standing American bank BankProv to offer Ether-backed lending services to its institutional clients.

Crypto Custodian Partners with Traditional Bank

BankProv, with a 200-year history established in 1828 as The Provident Bank.

Anchorage's primary business is providing crypto custody services to institutional investors, having raised over $57 million in funding since 2017, with investors including Blockchain Capital, Andreessen Horowitz, and Visa.

Furthermore, in June 2019, Anchorage announced its involvement as a member of the Libra Foundation, a stablecoin project by Facebook, actively engaged in the digital currency space.

Ethereum-backed Loans from Banks

Through this collaboration, institutional clients of Anchorage, who custody Ethereum, can now leverage their assets for further use, with Anchorage continuing to hold ETH as collateral, while BankProv offers USD-denominated, ETH-backed loans.

Previously, Anchorage had also partnered with digital asset bank Silvergate to provide Bitcoin-backed loans, operating similarly, with Anchorage handling the collateral custody and Silvergate providing USD-denominated loans.

CEO of Anchorage, Diogo Monica, stated:

Lending is Anchorage's fastest-growing business, and we plan to establish partnerships with other banks. While institutions have started investing in Bitcoin, the adoption of Ethereum and DeFi projects may be slower, the fact that the 10th largest bank in the U.S., BankProv, is offering Ethereum-backed loans indicates that adoption is steadily expanding.

The Rise of Ethereum

Monica also pointed out that as Bitcoin's market dominance continues to decline, institutional investors may increasingly need other types of cryptocurrencies as collateral:

Once Bitcoin is accepted, Ethereum will follow, and shortly after, new assets will emerge as well. Institutions will be satisfied with a basket of assets, but they need time to adapt, especially as these assets must meet liquidity and volatility requirements in risk management.