Crypto custody bank Anchorage Digital is expanding its lending service with ethereum-backed loans through BankProv, a traditional Massachusetts-based bank formerly known as Provident Bank.

Anchorage already provides bitcoin-backed loans through other capital providers, including Silvergate Bank, and is looking to provide institutional clients bank-grade loans on their ethereum as well. 

Crypto-lending startups have offered ethereum-backed loans for some time – ETH makes up 27% of Genesis’ loan book – but this seems to be the first time ETH-backed loans have been extended through an FDIC-insured bank.

“A lot of clients have ethereum that’s highly appreciated, and they can’t get liquidity because no one extends them credit on those assets,” Anchorage co-founder Diogo Mónica said.

In July 2019, BankProv said it was going to begin banking digital-asset firms with the help of compliance firm Treliant and Bitfury’s blockchain analytics platform, Crystal. 

With $1.5 billion in assets, BankProv is smaller than some better-known crypto-friendly banks such as Silvergate and Signature. It has, however, recruited from other banks that have worked in the digital-asset industry, including Radius Bank and Metropolitan Commercial Bank. 

Anchorage has had the ability to extend ETH-backed loans to its clients, but forming partnerships with other banks is allowing it to scale its crypto-backed lending product, Mónica said. 

“On a daily basis there are more banks coming in,” he said.