VersaBank Inc., Canada’s smallest bank in terms of assets, is responding to the need for digital asset security by creating a digital vault that will be available by June.
The bank recently hired Gurpreet Sahota, a cybersecurity expert, from Blackberry Ltd., a company long seen as an encryption and security leader. Sahota will oversee the design of the “VersaVault” that will store digital assets on computer servers, according to Bloomberg.
David Taylor, VersaBank’s CEO, said most peoples’ assets are contained in some type of digital format, be it a contract, deed or cryptocurrency.
VersaBank will not be able to access or know what contents are in the vault. Taylor said having no way to open the vault ensures its privacy.
VersaBank is responding to the need for digital security, an area which is calling for attention given the recent heist of more than $500 million from Coincheck Inc., a Japanese cryptocurrency exchange. Hackers usually gain access to cryptocurrency exchanges through their Internet connected wallets.
Taylor said large funds have indicated an interest in storing their assets in VersaVault since it was announced last month. The pricing for the service has not been determined, but Taylor said the service will be expensive.
Several U.S. banks have said they are halting cryptocurrency purchases on credit cards, citing security concerns.
VersaBank is not the first company to respond to the need for digital asset security.
Goldmoney Inc., a Toronto-based firm that allows clients buy, sell and store precious metals in vaults in seven countries, began offering bitcoin storage in September.
Shinhan Bank in South Korea said in November that it intends to build a bitcoin vault by midyear.
Taylor introduced a branchless bank in Canada in 1993, four years before ING Groep NV offered telephone banking as ING Direct.
VersaBank operates on a branchless electronic model, gathering deposits from brokers and buying loan and lease receivables from non-bank financial firms. The bank also works with partners to provide financing for retail and small businesses.
VersaBank has a market value of about $126 million, 80 employees and has outperformed Canada’s big banks. Its shares rose 24% this year compared to a 2.9% decline of the eight-company S&P/TSX Commercial Banks Index.
Last year VersaBank rose 19% compared to the banks index’s 11% gain.
Featured image from Shutterstock.