A group of former executives at Signature Bank, the crypto-friendly bank closed in March 2023, announced on Thursday the launch of a new blockchain-powered full reserve bank with the goal of offering programmable payments in US dollars.
Dubbed N3XT, the bank operates under a Wyoming Special Purpose Depository Institution (SPDI) charter, settles payments instantly using a private blockchain system, and allows businesses to automate transactions through smart contracts.
Unlike traditional banks, N3XT does not lend deposits. Instead, it is the so-called “narrow bank” where each dollar is backed one for one by cash or short-term US Treasuries and is disclosed daily.
At the helm is CEO and President Jeffrey Wallis, formerly head of digital asset strategy at Signature Bank. Scott Shay, co-founder of Signature and creator of its Signet crypto payments platform, is also the founder of N3XT.
The firm 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, among others. The company has raised $72 million in three rounds of financing, the last of which was in October, according to data from Crunchbase.
The move comes more than two years after state regulators shut down Signature Bank in March 2023, just days after the collapse of Silicon Valley Bank. The Federal Deposit Insurance Corporation at the time cited Signature’s overreliance on uninsured deposits and weak risk controls as key reasons behind the closure. Signature Bank’s key offering was Signet, a real-time payments platform that was popular with crypto companies.
N3XT said it aims to offer a service similar to what Signet once provided. Its architecture is designed to be programmable and compatible, allowing companies to automate monetary operations such as payments to suppliers or collateral adjustments without having to wait for traditional banking hours.
“We are applying crypto innovations to banking to offer instant, programmable payments for 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 company already has clients in industries such as crypto, shipping and logistics, and foreign exchange with a “strong portfolio” of incoming clients, the bank said.
