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Silvergate’s Closure of Payment Network Could Boost Use of Stable Currency in Cryptocurrency Transactions

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It is reported that a new study by Kaiko, a digital asset data provider, found that Silvergate\’s decision to close its real-time payment network may promote in…

Silvergates Closure of Payment Network Could Boost Use of Stable Currency in Cryptocurrency Transactions

It is reported that a new study by Kaiko, a digital asset data provider, found that Silvergate’s decision to close its real-time payment network may promote investors to use stable currency in cryptocurrency transactions. The study predicts that investors will not deposit US dollars in exchanges using Silvergate’s SEN and other bank tracks, but will deposit them in stable currency issuers to receive stable tokens before transferring them to the exchange.

Report: stable currency can benefit from the plight of Silvergate

Analysis based on this information:


A new study conducted by Kaiko, a leading digital asset data provider, has found that the closure of Silvergate’s real-time payment network may lead to increased use of stable currency in cryptocurrency transactions. The study predicts that investors will opt to deposit their US dollars in stable currency issuers rather than exchange using Silvergate’s SEN and other bank tracks. They will then receive stable tokens before transferring them to the exchange.

Silvergate is a bank that is popular among cryptocurrency exchanges due to its real-time payment network, SEN. It allows exchanges to deposit or withdraw money from their accounts in real-time, without any delay or wait time. This makes it possible for exchanges to take advantage of market opportunities quickly. However, Silvergate recently announced that it will be closing its SEN network for scheduled maintenance for two weeks.

The closure of SEN has sent shockwaves across the cryptocurrency market. The study by Kaiko suggests that this could lead investors to seek out alternative methods of transacting, and stable currencies are likely to be the most popular option. Stable currencies are cryptocurrencies whose value is tied to a stable asset like the US dollar or gold. This means that their prices are less volatile than traditional cryptocurrencies, like Bitcoin or Ethereum.

The study explains that by depositing funds in a stable currency issuer, investors can avoid the risk of losing value due to currency fluctuations. They can then transfer the stable tokens to the exchange, where they can use them to purchase other cryptocurrencies or trade them for other assets.

In conclusion, Silvergate’s decision to close its real-time payment network may have unintended consequences for cryptocurrency exchanges. The closure could lead to increased adoption of stable currencies among investors, who may no longer be willing to use other bank tracks. As we continue to witness the evolution of the cryptocurrency market, the use of stable currencies in transactions may become more important than ever before.

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