Photo by Adobe Stock/Markus Mainka
With Signet, Signature Bank, which has two locations in the county, enters the arcane world of blockchain and cryptocurrency.
Super-CEO Jamie Dimon is a well-documented skeptic, even naysayer, of cryptocurrency, yet according to reports his JPMorgan Chase is going all in nonetheless, offering an actively managed bitcoin fund to its wealthy clients. But lest you think the U.S.’ largest bank is going rogue, think again.
Signature Bank, a New York-based full-service commercial bank with 37 private-client offices — including two in Westchester — has become the first FDIC-insured bank to launch a digital-payments platform to clients via blockchain technology. Known as Signet, Signature Bank commercial customers will have the ability to make payments and conduct transactions between and among its other participating commercial customers 24/7, 365 days a year. In June, Signature Bank hooked up with TrueUSD, a fully collateralized stablecoin (a blockchain digital asset designed to maintain a consistent value) that is not only backed by the U.S. dollar in a 1:1 ratio but is also legally protected and verified by an independent top-25 U.S. accounting firm.
“Signet is secure, private, and settles in under 30 seconds, with no transaction limitations or transaction fees.”
—Susan Turkell, Signature Bank spokesperson
“This means that our clients are not restricted to operate and settle transactions during normal business hours via Fedwire, SWIFT, ACH, et cetera,” says Susan Turkell, a spokesperson for Signature Bank. “Signet is secure, private, and settles in under 30 seconds, with no transaction limitations or transaction fees.” If you’re wondering what’s in it for the bank, Turkell says the blockchain Signet platform “incentivizes continued growth of core deposits from its client base.”
Yet, cryptocurrency — especially bitcoin — remains controversial, with the likes of Bill Maher, Elon Musk, and Pulitzer Prize winner Elizabeth Kolbert of The New Yorker joining Dimon in their strong dissent. A nexus of concern involves what’s called data mining, which expends astronomical amounts of energy in order to sift through unimaginable quantities of raw data in search of anomalies, patterns, and trends. According to Digiconomist.net, a single bitcoin transaction uses the same amount of power that the average American household consumes in a month and is responsible for roughly a million times more carbon emissions than a single Visa transaction. Meanwhile, the Cambridge Center for Alternative Finance estimates bitcoin’s annual energy consumption as being roughly the same as Sweden’s over the same period.
That concern hasn’t been lost on Signature Bank, whose Signet service is the first of its kind to be approved for use by the New York State Department of Financial Services. “As it relates to Signet, we have designed a very low power consumption service,” says Turkell, “which uses a power-efficient proof-of-authority confirmation algorithm that is very different from traditional mining operations.” She admits, however, that getting all of Signet’s bitcoin-mining clients to adopt green-energy solutions for their respective operations is going to take some time but that the process has already begun.
For those who may find themselves crypto-leery, Signet offers live, around-the-clock customer support to help understand and navigate this emerging yet hot-button realm of fintech.