Anchorage Raises $80 Million as Banks Seek to Solidify Bitcoin Strategies

Anchorage, the “crypto bank” for financial institutions, has raised $80 million in Series C funding led by GIC, Singapore’s sovereign wealth fund.

The four-year-old company plans to use the funds to help it scale its lending operations and hire more people to keep up with fast-growing demand by institutions seeking to adopt bitcoin and other digital assets into their offerings and operations.

“In 2017 institutions were coming to us, but they were asking what they should be doing in crypto, it was very much an exploratory phase,” Anchorage president and cofounder Diogo Monica told Blockworks. “We’ve seen a complete 180. The people reaching out to us now are coming to us with specific products, questions, and goals, and are looking to see how our bank and our platform can help them achieve that.”

Specifically, Monica said customers want to add digital assets alongside equities trading and provide custody for ultra-high net worth clients. Many “now have pretty significant” positions in cryptocurrencies and want to use them as collateral for loans, he said, adding that some are also looking to participate in high yield generating opportunities on digital assets.

With companies just starting to buy bitcoin (see Square, Tesla and Microstrategy, for whom bitcoin buying is an increasingly frequent event), it’s clear to Monica that the capital preservation narrative for bitcoin is gaining steam.

“They’re not going to be the last ones,” he said. “Many corporates are taking these positions and haven’t announced them, but they’re all coming to Anchorage to put some of their balance sheet in crypto.”

But Anchorage’s interests also go beyond US corporates.

“The money is going very much to global expansion,” Monica said. 

While the bank has existing customers across Europe, South America and Asia, he said it plans to be “a lot more aggressive” in those markets this year as more companies in those regions show increased interest in working with Anchorage. 

“They believe in the regulatory structure of the United States being one of the best in the world so they really want to engage with an American custodian,” Monica said of the bank’s international customers.

Anchorage also partners with global companies like Visa, which recently unveiled an API that allows banks’ customers to buy, sell, and hold digital assets through their banking apps – through its Anchorage partnership.

Monica also noted that other sovereign wealth funds, like GIC, are “waking up to crypto and coming in in a meaningful way.”

Anchorage serves institutions exclusively, though that set ranges from young digital-first banking apps all the way to bulge bracket banks.

Last month the digital asset custodian received the first national trust charter from the US Office of the Comptroller of the Currency, allowing it to become a regulated “crypto bank.” 

Anchorage has just about 100 employees today and expects to double that by the end of the year. Monica said its international expansion will also open the candidate pool. It also plans to continue supporting new protocols in addition to Celo, Filecoin and Oasis, which it added last year.

Andreessen Horowitz, Blockchain Capital, Lux and Indico also participated in the fund raise.