'Already Live': Signature Bank Is Moving Millions on a JPMorgan-Like Private, Dollar-Backed Cryptocurrency

While crypto-land is abuzz about JPMorgan's plan to move U.S. dollars around via blockchain, a smaller New York bank has already been doing this for nearly two months.

Since launching at the start of the year, Signature Bank's blockchain-based Signet system has on-boarded more than 100 clients who are using it to send each other millions of dollars a day, 24/7, bank executives said.

Signature is one of the few banks in the U.S. that will provide deposit accounts to cryptocurrency startups, a group that also includes fellow New Yorkers at Metropolitan Bank and Silvergate Bank in San Diego.

While these clients were the first group to adopt Signet, the bank says non-crypto businesses are signing up as well.

In addition to the previously announced American PowerNet, an independent electrical power trading firm that made Signet the payments platform for its renewable energy customers, DePaolo said Signature is bringing on two other "Ecosystems" where rapid movement of money and property is important.

With $45 billion in assets, Signature Bank is less than 2% the size of JPMorgan, the largest bank in the U.S. So it's perhaps understandable that DePaolo and Signature chairman Scott Shay clearly took some pride in pointing out that JPM Coin, announced Thursday, is remarkably similar to what they already have.

A rather subtle similarity between Signature's blockchain system and JPM Coin is that both run on private variants of ethereum technology.

Another commonality is that both involve stablecoins, with real-world dollars deposited at the bank in exchange for tokens that clients can send each other via a distributed ledger, then redeem again 1-to-1 with the institution.

The goal of replacing wire transfers with a blockchain is also reminiscent of crypto-friendly rival Silvergate Bank's SEN system that instantly connects to its clients 24/7. But Signature chairman Scott Shay claimed the broad uses of Signet sets it apart.

Returning to JPM Coin, Shay pointed out that Signet has already received approval from the New York State Department of Financial Services.