A group of former executives from Signature Bank, the crypto-friendly bank that closed in March 2023, announced Thursday the launch of a new fully-reserved, blockchain-powered bank that aims to offer programmable payments in U.S. dollars.
The bank, called N3XT, 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 a so-called “narrow bank” where every dollar is backed one-for-one by cash or short-term U.S. Treasury bonds and disclosed daily.
At the helm is CEO and President Jeffrey Wallis, former Director of Digital Asset Strategy at Signature Bank. Scott Shay, co-founder of Signature and the creator of its crypto payments platform Signet, also serves as founder of N3XT.
The company is backed by venture capital firms including Paradigm, HACK VC and Winklevoss Capital – the VC firm of crypto exchange Gemini founders Tyler and Cameron Winklevoss. According to data from Crunchbase, the company has raised $72 million in three funding rounds, the latest in October.
The move comes more than two years after state regulators shuttered Signature Bank in March 2023, just days after the collapse of Silicon Valley Bank. The Federal Deposit Insurance Corp. at the time, cited Signature’s overreliance on uninsured deposits and weak risk controls as the main reasons behind the closure. Signature Bank’s main offering was Signet, a real-time payments platform popular with crypto companies.
N3XT said it aims to offer a similar service to what Signet once offered. The architecture is designed to be programmable and compatible, allowing companies to automate monetary transactions such as vendor payments or collateral adjustments without having to wait for traditional banking hours.
“We are applying crypto innovations to banking to deliver instant, programmable payments for institutional clients,” Jeffrey Wallis said in a statement. “Our platform gives companies the control and reliability they need in a 24/7 global economy.”
The company already has clients from sectors such as crypto, shipping and logistics, foreign exchanges with a “robust pipeline” of inbound customers, the bank said.