A group of former executives from the collapsed crypto-friendly Signature Bank has launched a new blockchain-based, state-chartered bank called N3XT, with the goal of enabling instant 24-hour payments.
N3XT said on Thursday that it aims to settle payments instantly at any time using a private blockchain and offers programmable payments through smart contracts. The company added that its systems have been designed for interoperability with stablecoins, utility tokens, and other digital assets.
Signature Bank founder Scott Shay founded N3XT, which will operate under a Wyoming Special Purpose Depository Institution (SPDI) charter and will not offer lending services.
Signature Bank was one of three crypto-friendly banks, along with Silicon Valley Bank and Silvergate Bank, that collapsed in the 2023 US banking crisis due to a bank run and ties to the then-rapidly falling crypto market.
The Federal Deposit Insurance Corporation took control of Signature Bank in March 2023, just days after the collapse of Silicon Valley Bank, saying it had an overreliance on uninsured deposits, weak risk controls and was facing a worsening run on deposits.
N3XT avoiding lending services
Jeffrey Wallis, Signature Bank’s former director of digital asset and Web3 strategy, will be N3XT’s CEO and president and said that crypto innovations are at the heart of the new venture.
“Money should move as seamlessly as information,” he said. “We’re applying crypto innovations to banking to deliver instant, programmable payments for institutional clients.”
N3XT won’t be offering lending, and the bank claims its reserves are also backed one-to-one by cash or short-term US Treasurys, with promises to share reserve holdings daily.
At launch, N3XT lists its client base as unnamed businesses across crypto, foreign exchange, shipping and logistics, and a variety of other sectors.
Crypto venture capital firms backing N3XT
The bank raised three rounds of financing from a range of investors that included Winklevoss Capital, the venture capital firm of Tyler and Cameron Winklevoss, Paradigm and HACK VC.
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Hack co-founder Alexander Pack said in an X post on Thursday his firm is ready to support N3XT and its founders as they emerge from “stealth mode.”
“N3XT’s founders, Scott and Jeff, are forces of nature: they previously built Signature Bank, the biggest and best bank to support the US crypto industry in a regulated way, before the last administration forced them to shut down,” he said.
“Most founders would quit after something like that, but instead they immediately went back to work building N3XT,” Pack added.
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