LevelField Financial’s Acquisition of Burling Bank
LevelField Financial, a fintech company specializing in digital assets, has received conditional regulatory approval to acquire Burling Bank, a financial institution located in Chicago. This acquisition is noteworthy as it may establish LevelField as the first federally insured bank offering crypto-integrated services throughout the United States.
Details of the Acquisition
In a recent announcement, the firm did not disclose the financial details of the purchase but noted that this step brings Burling Bank closer to rebranding as LevelField Bank. Additionally, the transaction still requires sign-off from the Federal Reserve’s Board of Governors to allow LevelField to become a bank holding company.
Future Services and Target Market
Once operational under the new branding, LevelField is expected to roll out a range of 24/7 services encompassing cryptocurrency banking solutions, including:
- Loans backed by Bitcoin
- Credit and debit cards featuring Bitcoin rewards
- Offerings related to the trading and safeguarding of digital assets
As a modest commercial bank, Burling Bank currently holds approximately $196 million in net assets and has around $158 million in customer deposits, as reported by Visbanking data.
Bridging Cryptocurrency and Traditional Banking
LevelField aims to specifically target businesses in sectors that are typically underbanked, while benefiting from the robust regulatory framework provided by the US banking system. CEO Gene A. Grant II expressed his appreciation for the investors and partners who supported the extensive efforts required to comply with consumer protection guidelines that uphold the integrity of the US banking landscape.
Concerns in the Banking Sector
This acquisition represents a significant move towards bridging the gap between the cryptocurrency market and traditional banking, which historically has experienced a strained relationship. Recently, as institutional interest in cryptocurrencies has grown, US banking institutions have voiced concerns regarding the potential impact of yield-bearing stablecoins on their deposit bases, which are critical for funding loans and providing competitive saving options.
The US Treasury Department echoed these apprehensions in April, estimating that a shift towards stablecoin usage could result in an alarming outflow of approximately $6.6 trillion from conventional bank deposits. Furthermore, the Federal Reserve has adopted a cautious approach towards cryptocurrencies, particularly after the downfall of several crypto-friendly banks earlier this year, such as Silvergate Bank, Silicon Valley Bank, and Signature Bank.
