A New Bank for Crypto Traders Has Opened in Puerto Rico
Following on from our previous crypto heaven article, it has now become apparent that Puerto Rico is going all out on the crypto front …
A brand-new Puerto Rico-based financial institution catering to traders of cryptocurrency has opened for business. San Juan Mercantile Bank & Trust International (SJMBT), a new Puerto Rico-based organization accommodating traders of cryptocurrency, has opened for business.
Announced Monday, SJMBT has actually accepted its very first client deposit. Licensed last month as a global financial entity (IFE) by Puerto Rico’s Office of the Commission of Financial Institutions (OCIF), the bank is a system of Mercantile Global Holdings (MGH), which likewise owns San Juan Mercantile Exchange (SJMX), a soon-to-be-launched “institutional-grade electronic trading platform for digital assets.”
The bank will provide custody and settlement services for both fiat and crypto traded on the exchange. SJMBT itself is not guaranteed by the U.S. Federal Deposit Insurance Corp. (FDIC), but a representative informed CoinDesk it will position customers’ deposits at correspondent banks that are.
Likewise, clients’ digital assets will be held at “approved digital asset custodians,” the company stated. The spokesperson would not mention any of the bank’s correspondents or custodians, nor its preliminary customers.
Keeping custody and trading under the exact same system will bring specific benefits, MGH said. For example, the exchange will take into consideration customer balances on deposit at the bank when setting trading limits, enabling the bank to settle trades in real time.
“As more liquidity venues onboard with SJMX to trade digital assets, SJMBT will provide critical services, such as real-time settlement and account re-balancing, in support of our customers’ trading activities, ” said Nick Varelakis, president and chief operating officer of SJMB&T.
MGH’s leadership includes veterans of well-known financial companies.
Varelakis, for instance, is a previous executive director of JPMorgan Chase for business architecture and transformation, along with a former chief operating officer of Puerto Rico’s Noble Bank, best known in the crypto space for its erstwhile relationship with Tether, the business behind the namesake stablecoin.
Additionally, the MGH bank and exchange were established a year back by J. Robert Collins Jr., previous president of the New York Mercantile Exchange (NYMEX, a part of CME Group) and a founder of the Dubai Mercantile Exchange.
Trading will be introduced imminently, the company indicated. “With the brand-new customers onboarded at [the bank], [the exchange] has the ability to release exchange operations, via the SJMX Dark Pool platform and through SJMX Blocks, its over-the-counter (OTC) trading location, ” MGH’s press release says.
Banking remains hard to come by for cryptocurrency market participants, with just a handful of organizations ready to serve the sector due to money laundering concerns and other perceived risks.