Name: Avanti Bank may be solving one of the biggest issues with Cryptocurrency
Uploaded: 2021-08-04
Duration: 6 min 46 s
Description: CEO Caitlin Long tells us how she was able to make her dream a reality in her home state of Wyoming.

CEO Caitlin Long tells us how she was able to make her dream a reality in her home state of Wyoming. 

Avanti Bank may be solving one of the biggest issues with Cryptocurrency

Caitlin Long - Founder & CEO, Avanti Financial Group

Fortune_Crypto

Avanti Bank may be solving Cryptos biggest issue 

so avanti is a crypto bank that is the second bank in Wyoming to get a special charter to handle both dollar transactions and Cryptocurrency like Bitcoin. This is something that avanti Ceo and founder Caitlin Long has helped create and advocated for in the state of Wyoming, which has passed several very friendly laws for the Cryptocurrency industry. It created a new type of bank charter, the first type of bank charter in the United States in 40 years. And it's specially designed to handle digital assets in a way that doesn't allow the banks to take any risk other than the digital asset. Operational risk, no payment system, risk, no price risk on the digital assets. The banks are really just custody. Banks that are holding just like your bank holds, your security is in custody for you, but isn't exposed to the price volatility. The same thing is true here, avanti has applied for Wyoming special charter that will allow it to handle both dollars and Cryptocurrency like Bitcoin. And right now it's waiting on Federal Reserve approval to be able to process transactions from one to the other in the United States. In order to be able to bank at the Fed, you have to have a bank charter. What we've done is ask for permission to be a fintech that banks directly at the Fed. Almost every bank in the United States abandoned this industry in its entirety. So we were trying to solve a very practical problem of all right. If the banks don't want to bank this industry because they deem at high risk, we knew that we could manage those risks. And so let's just go get a bank charter for the industry on its own. Avanti is focused on businesses and institutional investors, um, and hoping to serve other crypto businesses, large investors, pension funds, unlike for example, it's competitor crack in which has also received a special charter from Wyoming. When I tried to donate appreciate a Bitcoin to my alma mater, the University of Wyoming to fund an endowment for female engineers back in 2017 and ran Smack Dab into Wyoming problematic money transmitter law at the University of Wyoming Foundation was unable to accept my donation in Bitcoin because there wasn't anyone who was able to liquidate the Bitcoin back to cash for them. So I had been on the UW Foundation board for years. My father was a professor there. I'm an alumna of the University of Wyoming And so I said, guys, we're going to miss this Bitcoin thing and it's going to be big And keep in mind this was 2017 And so I said, why don't I just help you? I'll roll up sleeves and come out and volunteer. The legislative session was upcoming in January 2018 and I basically just camped out here for 20 days all on my own time and dime and uh talk to legislators one on one and helped them understand that this was not as scary as it might have seemed. And ultimately, the state of Wyoming past five different laws in that 2018 legislative session and we've seen a few other states replicated. But what we, we haven't seen anyone have the magic of Wyoming. We're, we've now passed 24 laws in for legislative sessions beginning with that 2018 legislative session. It's it's an incredible thing, the whole state seemingly got behind this. So Cynthia lummis is the junior U. S. Senator from Wyoming. She's very crypto friendly and she's been advocating for more crypto based laws at a national level. She's also formed a bipartisan Financial Innovation caucus with Senator Kirsten cinema of Arizona. And I spoke to Senator llamas who said that she's looking for Congress to really take action and write more laws around crypto as opposed to waiting for some of the more traditional financial regulators to cast what has been perhaps a more skeptical and slow i on the industry, there's a perception out there that when a state goes and breaks ranks to try to be early on economic development, especially in the financial sector, that the regulations are looser. In fact, actually, it's polar opposite. The regulations are very tight. The Wyoming special purpose depository institutions can't lend, they can't take risks in their investment portfolio. They're really there to do mostly one thing and one thing only, which is provide custody services and related services around that. The financial rails that the world works on are really 40 years old for the most part or in some cases older and this is the reason why it takes so long to move money and even though we have new services like Venmo and sell that, make it look like you're moving the money fast. In fact, actually behind the scenes that money is still moving on the old rail and so we're using these new technologies to find better ways for the users of the financial system to move dollars around better, faster, cheaper, more transparently. And in a way where the transactions settled fast. So it doesn't trap capital or cash on the party that is carrying the unsettled transaction obligation. So there are definitely critics and skeptics of what's been happening in Wyoming and I think one concern that I've heard expressed both within the industry and by those who are concerned with financial regulation in general is that this is a fast growing industry that Wyoming has created a lot of laws and passed a lot of laws that are fairly friendly and that this could down the line create a lack of controls on the industry. That is, the crypto industry grows, it has the potential to pose a more systemic risk to the financial system and the legislation that Wyoming has passed, and that will allow crypto businesses and crypto startups to do business more nationally, might not be enough to protect against those risks and to protect consumers in the long term boy, there's a lot of inefficiency in the traditional payment system and that's what these technologies very clearly are designed to help. We've got years of work ahead of us to roll these out mainstream, but it's happening actually faster than I thought it would. I thought it would take 20 years, We're five years in and frankly, we've in some ways made a lot more progress than I thought we would have by now.