Metropolitan Bank Holding Corp., the community bank that went public in November, has seen its stock gain close to 40 percent, and the boost may be the result of a bitcoin debit card.
According to a report in Bloomberg, Metropolitan is the issuing bank for the Shift Card, which enables users to spend their bitcoins wherever Visa is accepted. The debit card exchanges a customer’s bitcoin for U.S. dollars at the trading value of bitcoin when a sale is processed. This enables investors to benefit from the increasing value of bitcoin, while at the same time the bank isn’t forced to keep the ever-volatile bitcoins on its balance sheet.
The potential surge in Metropolitan Bank due to its bitcoin debit card is just the latest indication of a cryptocurrency frenzy. Bitcoin started off the year trading at around $1,000, and last week surpassed $17,000. Earlier Tuesday (Dec. 12), Joseph Borg, president of the North American Securities Administrators Association, warned that bitcoin has entered the “mania” phase, with some people taking out mortgages just to purchase the cryptocurrency.
In an interview with CNBC, Borg said that bitcoin shares have to level off at some point. “We’ve seen mortgages being taken out to buy bitcoin … People do credit cards, equity lines,” he pointed out. “This is not something a guy who’s making $100,000 a year, who’s got a mortgage and two kids in college ought to be invested in.”
Borg acknowledged that cryptocurrency is here to stay – as is blockchain, the technology that underpins it – but he doesn’t think the moves by CME and Cboe to launch bitcoin futures will actually validate the digital currency market.
“As [technology] continues to accelerate and continues to increase, regulators have got to understand what it is that the innovation’s coming up with, and we’re still trying to get educated,” he said. “We’re looking at it from a money transmission point of view, but that doesn’t cover the entire bitcoin space.”