A collective of ex-executives from the now-defunct crypto-friendly Signature Bank has introduced a new blockchain-driven, state-chartered institution named N3XT, aiming to facilitate instant payments around the clock.
N3XT announced on Thursday its intention to process payments instantly at any time utilizing a private blockchain and offering programmable payments via smart contracts. The company emphasized that its infrastructure is built for compatibility with stablecoins, utility tokens, and other digital assets.
Scott Shay, the founder of Signature Bank, established N3XT, which will function under a Wyoming Special Purpose Depository Institution (SPDI) charter and will not provide lending services.
Signature Bank was among the trio of crypto-compliant banks, alongside Silicon Valley Bank and Silvergate Bank, that failed during the 2023 US banking crisis, triggered by a bank run and its connections to the plummeting crypto market.
The Federal Deposit Insurance Corporation took control of Signature Bank in March 2023, shortly after the Silicon Valley Bank collapse, citing excessive dependence on uninsured deposits, inadequate risk controls, and a worsening withdrawal crisis.
N3XT refraining from lending services
Jeffrey Wallis, the former director of digital asset and Web3 strategy at Signature Bank, will lead N3XT as CEO and president, stating that crypto innovations are central to the new initiative.
“Money should flow as effortlessly as information,” he remarked. “We’re leveraging crypto innovations in banking to provide instantaneous, programmable payments for institutional clients.”
N3XT is not offering lending services and claims its reserves are fully backed by cash or short-term US Treasurys, promising to disclose reserve holdings daily.
Upon launch, N3XT’s client portfolio includes unnamed enterprises from the crypto, foreign exchange, shipping and logistics, and various other industries.
Crypto venture capital backing N3XT
The bank secured three rounds of funding from diverse investors, including Winklevoss Capital, the investment firm of Tyler and Cameron Winklevoss, Paradigm, and HACK VC.
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HACK co-founder Alexander Pack stated in an X post on Thursday that his firm is prepared to support N3XT and its founders as they step out from “stealth mode.”
“N3XT’s founders, Scott and Jeff, are remarkable: they previously created Signature Bank, the largest and most effective bank supporting the US crypto sector in a regulated manner, before the previous administration forced their closure,” he commented.
“Most founders would give up after such an experience, yet they immediately returned to creating N3XT,” Pack added.
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