Puerto Rico Approves Combination Bank for Fiat and Digital Assets

The San Juan Mercantile Bank & Trust International (SJMBT), a new bank in Puerto Rico catering to cryptocurrency traders, is now fully operational.

SJMBT announced its receipt of all appropriate licensing from Puerto Rican regulatory officials to begin offering “fiat and digital asset custody and settlement services,” which are “to be integrated with the trading platforms offered by its affiliate, the San Juan Mercantile Exchange (SJMX).”

The combination of both fiat and digital asset services may be an advantageous offering for SJMBT customers.

“Deposits of fiat currency are held by SJMBT on behalf of its clients with its regulated correspondent banks, and digital assets are held by approved digital asset custodians,” according to the announcement. “Partnering with multiple custodians is intended to reduce costs and improve security.”

Puerto Rico has become a popular haven for crypto technology and its adopters in the aftermath of Hurricane Maria, which decimated the island’s infrastructure in late 2017. As The New York Times reported in 2018, Puerto Rico now offers crypto businesses “an unparalleled tax incentive: no federal personal income taxes, no capital gains tax and favorable business taxes — all without having to renounce your American citizenship.”

Taking advantage of these incentives, SJMBT is a new way for users to manage fiat and crypto assets on one platform in the region. The company’s president and chief operating officer, Nick Varelakis, said the bank will now be able to “provide critical services, such as real-time settlement and account re-balancing, in support of our customers’ trading activities,” per the announcement.

Varelakis is a former executive at the Puerto Rico–based Noble Bank, in which Tether kept more than $2 billion.