Sunday, February 25, 2018

Puerto Rico may someday have a cryptocurrency bank

By on February 12, 2018

SAN JUAN – Real estate developer Nicholas Prouty said a cryptocurrency bank backed by sovereign wealth funds may someday operate in Puerto Rico.

An institution of the sort could take care of the cash reserve needed to back tether, for instance, a “stablecoin” claimed to be pegged to the U.S. dollar. Tether is used by crypto-to-crypto exchanges as it allows them to price crypto-assets in U.S. dollars without having to maintain or own U.S. bank accounts.

While there are about $2.3 billion held in tether, potentially driving the price of bitcoin, there was speculation the cash reserve to back issued tether coins may not exist.

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During the annual Puerto Rico Investment Summit, Prouty spoke of “capital infusion from a sovereign wealth fund to create the initial reserve,” adding. “It will begin banking crypto soon. After speaking with these guys, it should take about a year before this bank can replace some lenders as a large financing entity for the Puerto Rican market.”

He added he believes the bank would make it interesting to participate in “targeted aspects of real-estate acquisitions and development,” and cause real-estate prices to rise.

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Editor’s note: This report has been corrected to clarify that Nicholas Prouty’s remarks do not suggest any position with respect to the Tether currency.

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