Digital Assets: Anchorage, The First Federally Chartered Digital Bank, Raises $80M

February 26, 2021 | Digital Assets, News, Venture Capital
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The crypto-custodian has since expanded into a digital asset service provider focused on institutions.

Federally chartered digital bank Anchorage announced Thursday its Series C raise of $80 million led by GIC, Singapore’s sovereign wealth fund, with participation from a16z, Blockchain Capital, Lux, and Indico. (Anchorage)

Crypto bank

Last month, Anchorage received conditional approval for a national trust charter for its Anchorage Digital Bank National Association. It became the first federally chartered digital asset bank in history. That put it on par with the traditional national banks in the country.

“Crypto deserves a bank, and we are immensely proud of being approved as the one to set the standard,” Anchorage said at the time.

The charter immediately made it possible for financial institutions to avail of Anchorage’s custody services for crypto assets and offer them to their clients.

Anchorage said it was rapidly blurring the lines between crypto and traditional finance, as it possessed both the tech and regulatory clarity sought by institutions considering a crypto foray.

But naturally, once Anchorage had bagged the charter it is moving beyond custody. On the anvil are a wide range of crypto-native financial products and services, from staking and governance, to financing and lending, to trading and DeFi.

And the new capital will come in handy here.

Use of funds

The new funds will enable Anchorage to expand its range of services on offer to crypto-inclined institutions.

One key area is onboarding crypto-assets onto corporate balance sheets. More and more companies are looking to diversify their reserves into digital assets such as bitcoin. MicroStrategy (NASDAQ: MSTR), Square (NYSE: SQ), and Tesla (NASDAQ: TSLA) have made outsized profits from investing in bitcoin.

“Anchorage is committed to supporting organizations looking to participate in the digital asset space, from supporting corporate treasuries to finding strategic ways to incorporate crypto into their operations,” the company said in a statement.

Anchorage also wants to enable institutions to generate a yield on their crypto holdings by lending them out. It is looking to play a role here by making the process easy and secure.

Metamorphosis

“Anchorage has gone through a brilliant metamorphosis — from a world-class custody solution to the standard-bearer for crypto banking,” said W. Bradford Stephens, Co-Founder and Managing Partner, Blockchain Capital. “In just a few short years, they’ve already been a powerful, catalytic force for institutional adoption, regulatory confidence, and overall maturation of the space.”

Diogo Mónica and Nathan McCauley founded Anchorage in 2017 to meet the growing need for institutional custody of crypto assets. The two previously worked at Square and Docker.

Visa (NYSE: V), too, is an investor in Anchorage. The company recently announced the pilot launch of its new suite of crypto APIs in collaboration with digital neobank First Boulevard. The APIs will enable the bank’s customers to purchase, custody, and trade digital assets.

In the pilot, Visa will enable the bank’s customers to connect to the infrastructure provided by Anchorage.

Related Story:    Visa Launches Crypto Pilot Program With Black-Focused First Boulevard

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