A group of former executives from Signature Bank, a crypto-friendly bank that closed in March 2023, announced on Thursday the launch of a new blockchain-powered full reserve bank designed to offer programmable U.S. dollar payments.
The bank, known as N3XT and operating under a Wyoming Special Purpose Depository Institution (SPDI) charter, uses a private blockchain system to instantly settle payments and allow businesses to automate transactions through smart contracts.
Unlike traditional banks, N3XT does not lend out deposits. Instead, it is a so-called “narrow bank” where every dollar is backed one-to-one by cash or short-term U.S. Treasuries and disclosed daily.
At the helm is CEO and President Jeffrey Wallis, formerly director of digital asset strategy at Signature Bank. Scott Shay, co-founder of Signature and creator of crypto payment platform Signet, is also the founder of N3XT.
The company is backed by venture capital firms including Paradigm, HACK VC and Winklevoss Capital (the venture capital firm of cryptocurrency exchange Gemini founders Tyler and Cameron Winklevoss). The company has raised $72 million in three rounds of funding, the most recent in October, according to Crunchbase data.
State regulators closed Signature Bank more than two years ago in March 2023, just days after Silicon Valley Bank collapsed. The FDIC cited at the time Signature’s overreliance on uninsured deposits and weak risk controls as primary reasons for the closure. Signature Bank’s main product is Signet, a real-time payments platform popular with cryptocurrency businesses.
N3XT said it aims to provide similar services to what Signet once provided. Its architecture is designed to be programmable and compliant, allowing businesses to automate monetary operations such as vendor payments or collateral adjustments without having to wait for traditional banking hours.
“We are applying cryptocurrency innovation to the banking industry to provide instant, programmable payment services to institutional clients,” Jeffrey Wallis said in a statement. “Our platform gives businesses the control and reliability they need in a 24/7 global economy.”
The bank said the company already has clients from industries including cryptocurrency, shipping and logistics, and foreign exchange, and has a “strong customer pipeline.”