A New Bank for Crypto Traders Has Opened in Puerto Rico

San Juan Mercantile Bank & Trust International, a new Puerto Rico-based institution catering to traders of cryptocurrency, has opened for business.

Licensed last month as an international financial entity by Puerto Rico's Office of the Commission of Financial Institutions, the bank is a unit of Mercantile Global Holdings, which also owns San Juan Mercantile Exchange, a soon-to-be-launched "Institutional-grade electronic trading platform for digital assets."

The bank will provide custody and settlement services for both fiat and crypto traded on the exchange.

SJMBT itself is not insured by the U.S. Federal Deposit Insurance Corp., but a spokesperson told CoinDesk it will place clients' deposits at correspondent banks that are.

The spokesperson would not name any of the bank's correspondents or custodians, nor its initial clients.

The exchange will take into account customer balances on deposit at the bank when setting trading limits, enabling the bank to settle trades in real time.

"As more liquidity venues onboard with SJMX to trade digital assets, SJMBT will provide critical services, such as real-time settlement and account re-balancing, in support of our customers' trading activities," said Nick Varelakis, president and chief operating officer of SJMB&T. MGH's leadership includes veterans of well-known financial companies.

Varelakis, for example, is a former executive director of JPMorgan Chase for business architecture and transformation, as well as a former chief operating officer of Puerto Rico's Noble Bank, best known in the crypto space for its erstwhile relationship with Tether, the company behind the namesake stablecoin.

The MGH bank and exchange were founded a year ago by J. Robert Collins Jr., former president of the New York Mercantile Exchange and a founder of the Dubai Mercantile Exchange.

"With the new customers onboarded at [the bank], is able to launch exchange operations, via the SJMX Dark Pool platform and through SJMX Blocks, its over-the-counter trading venue," MGH's press release says.