A group of former executives from the collapsed crypto-friendly Signature Bank has launched a new blockchain-based, state-chartered bank called N3XT. The primary goal of this new venture is to enable instant, 24-hour payments.
N3XT announced on Thursday that it aims to settle payments instantly at any time using a private blockchain. The bank will offer programmable payments through smart contracts. The company also stated that its systems are designed for interoperability with stablecoins, utility tokens, and other digital assets.
Signature Bank founder Scott Shay is the founder of N3XT. The new bank 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, alongside Silicon Valley Bank and Silvergate Bank, that collapsed in the 2023 US banking crisis. This collapse was attributed to a bank run and ties to the rapidly falling crypto market at the time.
The Federal Deposit Insurance Corporation took control of Signature Bank in March 2023, just days after the collapse of Silicon Valley Bank. The FDIC cited an overreliance on uninsured deposits, weak risk controls, and a worsening run on deposits as reasons for the bank's failure.
N3XT Focuses on Payments, Not Lending
Jeffrey Wallis, former director of digital asset and Web3 strategy at Signature Bank, will serve as N3XT’s CEO and President. Wallis stated that crypto innovations are central to the new venture.
"Money should move as seamlessly as information," Wallis said. "We’re applying crypto innovations to banking to deliver instant, programmable payments for institutional clients."
N3XT will not offer lending services. The bank claims its reserves are backed one-to-one by cash or short-term US Treasurys and has committed to sharing its reserve holdings daily.
At its launch, N3XT's client base includes unnamed businesses across various sectors such as crypto, foreign exchange, shipping, and logistics.
Crypto Venture Capital Firms Back N3XT
The bank successfully raised three rounds of financing from a range of investors, including Winklevoss Capital, the venture capital firm founded by Tyler and Cameron Winklevoss. Other notable investors include Paradigm and HACK VC.
Hack co-founder Alexander Pack shared on X (formerly Twitter) that 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," Pack stated.
Pack added, "Most founders would quit after something like that, but instead they immediately went back to work building N3XT."