Before its failure in mid-March, New York-based Signature had earned a reputation as a crypto-friendly bank, thanks in large part to its groundbreaking Signet real-time payments platform. With Signet, companies could process transactions outside of business hours, making it an essential tool for key crypto functions such as minting and redeeming stablecoins.
Many in the crypto industry lamented the departure of Signet—the FDIC is reportedly trying to find a separate buyer aside from its successful sale of Signature—which would mark the end of 24/7 crypto banking until a new solution emerges.
Although Signet has become a major focus in discussions around “Operation Chokepoint 2.0,” the popular theory that U.S. regulators are trying to de-bank the crypto industry, lesser known is the firm that developed the platform for Signature: the fintech firm Tassat.
Signet was a white-label version of TassatPay, a private, blockchain-based solution currently operational at five other banks, including Cogent Bank, Customers Bank, and Western Alliance. Despite Signet’s demand among crypto firms, Tassat CEO Kevin Greene told Fortune that no other clients have expressed interest in using TassatPay for crypto payment settlement, nor have any new banks approached Tassat about developing a new version of Signet.
Greene said Tassat has a deck of use cases for TassatPay, ranging from payroll processing to private equity capital calls, but that cryptocurrency trading is not included. “We’re sympathetic—we know that’s where all the sex appeal is,” he told Fortune, “but it’s really a distraction for us.”
24/7 payments
While Bitcoin creator Satoshi Nakamoto initially conceived blockchains with the ideal of decentralization, Tassat repurposed the technology to be centrally controlled through a permissioned, proof-of-authority-based model—a system the company argues is more secure and efficient for clients. With TassatPay, banks can take the best of blockchains—namely, the ability to settle payments at any time without human interaction—but oversee the process themselves.
Although Signature was arguably the highest-profile Tassat client, thanks to Signet, Greene said that cryptocurrency settlement was far from the fastest-growing use case for the technology, with other clients using it for shipping and logistics, hospital reimbursements, and commercial construction.
According to Tassat data, the company executed over $500 billion in real-time payments in 2022 across its different clients—a figure that's now surpassed $1 trillion total. In October, Tassat also launched a new product, the Digital Interbank Network, which allowed banks using TassatPay to process payments between each other, completing over $800 million in transactions during its first three official days of operations. Signature did not participate in the network.
Greene said banks other than Signature had previously inquired about using TassatPay for crypto, but none have approached Tassat recently, even after Signature’s failure, despite the sudden lack of 24/7 banking options for crypto firms, which have relied on the technology through Signet and SEN, the non-Tassat payment processor for Silvergate, which collapsed in March.
“It didn’t end well for Signature Bank, so that might cause some people to have a little bit of caution around it,” Greene said.
Although the Federal Reserve is developing its own instant payment service called FedNow, which it recently announced will launch in July, Tassat remains the leading provider. Given the crisis for small- and medium-sized banks, Greene said their focus should be on incorporating technology that allows them to challenge the larger banks.
“That’s what’s going to save them,” he told Fortune. “Without it, they’re going to struggle.”
