Puerto Rican Bank Opens For Crypto Traders, Looks to Become Global Crypto Zone

A new bank named San Juan Mercantile Bank & Trust International (SJMBT) has been opened in Puerto Rico which is going to be the hub for cryptocurrency traders.

SJMBT has been licensed last month by the Office of the Commission of Financial Institutions (OCIF) of Puerto Rico as an international financial entity (IFE). The bank is an unit of Mercantile Global Holdings (MGH). SJMBT has accepted its first deposit from clients on Monday. MGH has also planned the launch of an institutional-grade electronic trading platform called San Juan Mercantile Exchange (SJMX) for investors’ digital assets.

SJMBT aims at providing custody and settlement services for both fiat and crypto traded on the exchange. Meanwhile, SJMBT, which is currently not insured by the U.S. Federal Deposit Insurance Corp. (FDIC), states to put its clients’ deposits at their respective banks.

Customers’ digital assets will be stored at “approved digital asset custodians”. The spokesperson would not take names of any of the bank’s correspondents or custodians, nor its initial clients.

For keeping custody and trading mutually beneficial the exchange will take into account customer balances on deposit at the bank when setting trading limits, which will enable the bank to settle trades in real time.

Nick Varelakis, president and CEO of SJMBT said:

“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.”

Varelakis, a former executive director of JPMorgan Chase, and a former chief operating officer of Puerto Rico’s Noble Bank, is popular in the crypto space for his contributions to Tether, a stablecoin.

Former president of the New York Mercantile Exchange (NYMEX) and a founder of the Dubai Mercantile Exchange, J. Robert Collins Jr. founded the MGH bank and exchange about a year ago.

According to MGH’s press release:

“With the new customers on board the bank is able to launch exchange operations, via the SJMX Dark Pool platform and through SJMX Blocks, its over-the-counter (OTC) trading venue. The company will launch trading very soon.”

For the crypto market traders and investors, there are very few banking institutions as it has limitations due to concerns on money laundering and other calculated risks.