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Morgan Stanley Explains How Silvergate Capital Corp. (SI) Benefits From the Presidents Report on Stablecoins

November 4, 2021 7:49 AM EDT
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Price: $93.26 -6.25%

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    13 Buy, 12 Hold, 0 Sell

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Morgan Stanley analyst Ken Zerbe reiterated an Overweight rating and $181.00 price target on Silvergate Capital Corp. (NYSE: SI) after the President's Working Group on Financial Markets issued a report outlining recommendations to Congress on how to properly regulate the use of stablecoins as a form of payment, including a recommendation that only insured depository institutions (IDIs) be allowed to issue stablecoins and hold stablecoin reserves.

This bodes well for the company with the analyst stating "the growing stablecoin
market (now $137.7 bil in market cap versus roughly $20 bil just a year ago) could end up being a vast source of deposits for the banking industry. It could also lead to new sources of revenues for the banks if they are able to charge for the minting and burning of stablecoins, which is part of our bull case investment thesis on Silvergate. Lastly, it could encourage banks to issue their own stablecoins, which would be a captive source of deposit growth."

For an analyst ratings summary and ratings history on Silvergate Capital Corp. click here. For more ratings news on Silvergate Capital Corp. click here.

Shares of Silvergate Capital Corp. closed at $222.13 yesterday.

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