Blockchain legislative champion and Wall Street veteran Caitlin Long has announced her next venture, the creation of a regulated crypto bank.
Named Avanti, the Wyoming based corporation is preparing to apply for a special purpose depository institution (SPDI) charter with the Wyoming division of banking.
Avanti will partner with bitcoin and blockchain technology startup Blockstream, which is slated to build adjacent blockchain application programming interfaces (APIs) and conventional banking APIs to support Avanti's product offering. Avanti's website suggests that the bank will offer payment, custody, securities and commodities services for institutional customers using digital assets.
An announcement on the Avanti website says:
Avanti plans to serve as a compliant bridge to the US dollar payments system and a custodian of digital assets that can meet the strictest level of institutional custody standards
Discussing the announcement on Twitter, Long stated that “a custodian doesn’t yet exist” that meets the high fiduciary standards which institutional investors rely on for assurance that their investments are protected. Expanding on the need for Avanti, Long said:
For various regulatory reasons, existing US banks & trust companies can’t provide optimal services to #crypto ... Avanti plans to break that logjam & thereby help keep the US from falling behind other countries whose regulated banks are already serving institutions in this mkt.
Reportedly, despite only being formed on 6 January 2020, Avanti has already raised USD$1 million in seed funding.
Avanti will not be the first banking institution to offer crypto-friendly services. Some notable comparisons include:
Ziglu, based in the United Kingdom, has applied to the United Kingdom’s Financial Conduct Authority to become an issuer of electronic money, and proposes to offer an all-digital account which holds multiple currencies, both fiat and digital, and allow users to spend any currency held in that account using a Mastercard debit card.
Bitwala, a German banking startup which allows users to open a full German bank account capable of sending and receiving SEPA (single euro payments area) transactions in both fiat and crypto.
Revolut a EU based neobank has provided crypto payments within it's banking app since 2017.
Notwithstanding these developments, maintaining stable banking relationships continues to be a key pain point for crypto and blockchain focused businesses in Australia.