Coinbase, one of the world’s leading cryptocurrency exchanges, has announced that it will no longer support Signature Bank’s Signet payment network. Despite still being active, the move entails that Coinbase users will no longer be able to transact using Signet on the platform. The decision is part of Coinbase’s efforts to streamline its operations, with the exchange stating that it will instead focus on supporting other payment networks, such as ACH and wire transfers. The move, however, is expected to have minimal impact on Signet’s overall functionality and performance.
Coinbase Discontinues Support for Signet Following Signature Bank’s Closure
Coinbase, a leading digital asset exchange and cryptocurrency wallet provider, has decided to discontinue support for Signet, a payment network previously offered by Signature Bank. The decision was reportedly made after Signature Bank was shut down by regulators on March 12, 2023. However, despite the bank’s closure, its Signet network remains operational as of March 20, 2023.
Coinbase first partnered with Signature Bank in October 2022 to leverage Signet for performing U.S. dollar transactions instantly and around the clock with exchanges and institutional clients. However, since Signature Bank’s services were frequently limited to commercial clients, such as crypto exchanges, Coinbase is now looking for a new network to fill the same role.
A spokesperson for Coinbase stated that the current situation is “not ideal” and emphasized the need for an updated financial system. Although the support for Signet has ended, Coinbase users can still transfer funds using traditional payment methods, through cryptocurrency deposits and withdrawals, as well as through conversions between the USDC stablecoin and the U.S. dollar.
Following its closure, Signature Bank was sold to Flagstar Bank on March 19, 2023, by the Federal Deposit Insurance Corporation (FDIC). It remains unclear whether Flagstar Bank will continue to support the blockchain-based Signet network or halt crypto-related activities.
In conclusion, the discontinuation of support for Signet by Coinbase highlights the importance of having an updated financial system in place. This situation shows the need for more reliable and accessible payment networks that can cater to a broader customer base. As regulatory measures in the crypto industry continue to evolve, developers, investors, and regulators must work together to create stable and secure frameworks for the financial sector.