Signature Bank extended dozens more loans under the federal Paycheck Protection Program (PPP) to cryptocurrency businesses than was previously reported. 

Around $20 million of the $1.9 billion in PPP loans the bank extended was given to roughly 40 firms in the digital asset space, said CEO Joseph DePaolo. The executive would not name the firms it gave PPP loans to or give an exact number of firms who took out a loan through the relief program. (Signature’s $1.9 billion in loans accounts for roughly .55% of the entire $350 billion that was disbursed through the U.S. Small Business Administration.)

Public records show that Signature issued loans to a number of prominent firms in the space, including Ethereum venture studio ConsenSys, VC firm Polychain Capital and crypto lender Celsius Network.

DePaolo said the bank’s crypto PPP loan volume was due to other banks serving crypto not having the resources to offer the same kind of program. Previously, CoinDesk reported that at least $30 million had been extended to crypto companies by several banks including JPMorgan Chase, Silicon Valley Bank, Cross River Bank and others. (CoinDesk also reported Signature had extended only nine PPP loans to crypto firms.)

Not PPP-proof

The news further reveals a deeper need in the crypto industry for relief in the wake of the global economic crisis caused by the COVID-19 pandemic. Likewise, Signature’s program proves the bank’s commitment to the digital asset space. 

Read more: Blockchain Startups Got $30M+ in US ‘PPP’ Bailout Loans

While Signature’s business is primarily focused on serving high-net-worth individuals and it does not call itself a crypto bank or refer to its digital asset team as a crypto banking division, the bank did rake in $1 billion in deposits from the sector in the second quarter 2020 alone. 

“I believe I said it about a year and a half ago, that if you weren’t into blockchain technology and the digital world in five years, you would have a problem as a bank. There’s three and a half years left, and it may be sooner,” DePaolo told CoinDesk in a recent interview. “I think the situation we have right now with this pandemic and the quagmire, it’s going to make the public look at digital currencies.”

Signature Bank’s crypto awakening

In January 2018, the bank hired Joseph Seibert as the senior vice president for its digital asset banking team. Seibert started with three employees and has grown the team to 12 as of August 2020. He was previously a vice president at similarly crypto-friendly Metropolitan Commercial Bank.

The bank’s Signet payments platform is a proprietary blockchain based on the Ethereum protocol which allows for fee-less instant fiat settlement. While it’s popular within the digital asset space, firms outside of the space, such as renewable energy companies, use Signet to settle thousands of transactions a day without dealing with the payment friction between suppliers and wholesale distributors. 

Read more: Signature Bank’s Crypto Deposits Grew $1B in Q2

Seibert added that Signet has the same capabilities as the Silvergate Exchange Network but is built on blockchain versus the bank’s internal systems. 

“We have the same ecosystem they have and did it in under three years,” he said. 

‘Octopus’ approach

The bank started out by serving exchanges, which Seibert calls “the octopus” because of how many firms that need banking services in crypto are tied directly to the exchanges. The bank now serves proprietary traders, hedge funds, custody firms, mining farms and other verticals in the space, he said. 

Signature does treat firms in the digital asset space carefully, to offset transactional costs for traditional payment rails (wires and ACH payments). For instance, digital asset exchanges on Signet have to keep 30% of their balance in a non-interest bearing account. 

Read more: Institutional Trading House ErisX Joins Silvergate Exchange Network

Signature’s PPP program and recent growth in deposits from crypto customers makes it confident as a leader in the cryptocurrency banking space, Seibert said. 

“There’s more bank competition overseas, but they are always going to need the U.S. dollar on-ramp,” he said. 

The bank is now looking to expand its Signet offering beyond U.S. dollars with the launch of a foreign currency exchange wallet sometime in the near future. A number of the bank’s clients are FX liquidity providers, and Seibert believes foreign exchange is a large component of the crypto space, with some FX trades still taking weeks to settle if a bank is not crypto-friendly. 

“Ideally we would like to launch that sooner rather than later, hopefully next year,” Seibert said of the new forex service.