Caitlin Long Targets $ 300 Billion Asset Class, Showcases Crypto Bank with Very First Bitcoin Products in US


A full reserve custodian bank for cryptocurrencies is underway. Caitlin Long, who drafted Wyoming’s blockchain and crypto legislation to support entrepreneurs in space, presented Avanti, a new us Bank in the service of digital asset industry through a range of products and services that are not currently available in US dollar markets.

The Wyoming-based bank is a collaboration with Blockstream, a global leader in Bitcoin and blockchain technology.

The crypto banking project has reportedly raised $ 1 million in seed funding to target the emerging digital asset class dominated by Bitcoin. According to Long, the company is currently preparing the lengthy process of a charter application. It plans to open in early 2021 to meet demand and provide critical solutions for the market.

The market as a whole is currently valued at $ 278 billion, at the time of writing, with Bitcoin dominating 63%, followed by Ethereum at 9.88%. XRP Completes Top Three Cryptocurrencies With 4.47% Market Share, According To Data Compiled By CoinMarketCap.

Long says the roughly $ 300 billion market is just too big to ignore, but doesn’t have the infrastructure to get big customers on board.

The Wall Street veteran adds,

“I founded Avanti with key support from top crypto scholars and major innovators in mainstream finance. The seed funding cycle recently came to a close. Avanti will serve institutional clients who need services around Bitcoin and crypto-assets.

A critical piece of the US market infrastructure is missing: a Bank which can act as a gateway to the Fed for payments and custody cryptography for large institutional capital (pensions / foundations / foundations / companies / sovereign wealth) who need it before entering cryptography in a big way. The regulations had blocked him.

Thanks to the wise men Wyoming legislature and Governor Gordon, Wyoming paved the way for the existence of such banks through its Special Purpose Depository Institutions Act (SPDI), which is the optimal regulatory-compliant structure in the United States to provide financial services around cryptography.

For various regulatory reasons, existing U.S. banks and trust companies cannot provide optimal services to cryptography. Avanti plans to break this deadlock and thereby help prevent the United States from falling behind other countries whose regulated banks are already serving institutions in this market.

SPDIs have very high regulatory requirements, including that all escrow deposits must be 100% reserved, assets cannot be remortgage, and consumer protections are by far the strictest and fairest in the industry. Many cryptography people in the industry have advised and commented on the first drafts of Wyomingthe SPDI law and its rules.

As decentralized assets that can power peer-to-peer transactions without banks or financial institutions, Bitcoin and its crypto cousins ​​allow people to “be their own bank” by keeping their own private keys and controlling their own. own crypto funds. The message is a powerful diktat to trigger a whole new global financial system where people do not depend on corporate institutions and banks to manage, control, hold or withhold their wealth.

But managing one’s private keys to maintain access to a digital wallet containing Bitcoin has proven to be a sore point for crypto newbies. The stakes are high when a piece of paper or other instrument containing passphrases and passwords is misplaced, stolen or lost forever – with a person’s “own bank” being completely wiped out.

Long believes there is a way to offer solutions that bolster the crypto movement’s zen for decentralization and lack of authority, while also helping people manage and protect their private keys. In essence, the new crypto bank aims to solve huge problems in the industry and is designed to offer the best of both worlds to spur a massive push into crypto without any reservations related to regulation or custody.

said long,

But wait, what about # NotYourKeyesNotYourPieces? Avanti respects this philosophy and plans to offer different levels of institutional childcare services accordingly (including signing up as a multisig service, new Block flow features and more).

Long says Avanti’s approach is significantly different from that of a traditional bank. The key to crypto-banking is to reinvent the way banks should fundamentally operate – by restricting their ability to use and abuse a customer’s funds.

Add Long,

“Remember, Wyoming the law is particularly favorable to consumers because it allows custody via bail (same legal treatment as valet or locker room – you give possession of your property to a service provider, but no legal title, and the service provider cannot use it for their own benefit).

In one bail, the concept is that your asset legally remains yours even if you give temporary possession to a service provider for safekeeping (for example, if your service provider goes bankrupt while keeping your asset in its custody, you recover it without waiting for a disorderly bankruptcy).

These kinds of things matter to large institutional investors, who are trustees. Ironically, the securities markets don’t offer it (to use the valet parking analogy, the securities custodian can rent your car from the Uber driver after you park it, only share a fraction of the earnings with you. and tell you that you are lucky to get your same make and model back. Also, if the garage goes bankrupt while in possession of your car, you are stuck as a creditor in a messy bankruptcy). From experience, you cannot be sure whether your custodian actually holds your securities. It’s wrong!

Wyoming took a different approach based on property rights – i.e. cryptography the custodian should be a simple service provider, not a counterparty forcing you into a debtor / creditor relationship. This is particularly important for cryptocurrency since there is no lender of last resort. Wyoming = Better Legal Regime for Consumers! “

Despite the innovative approach, it is not easy to disrupt the status quo.

“Hundreds of people have inquired about starting an IPSD. I expected a flurry when applications opened on 1/10 but until February no one applied. Wait wut? The high capital requirements stumbled the most (banks face much higher capital requirements than trust companies); others could not find people here willing to work for them; (for example, a Wyomingite responded to more than 100 recruitment requests before accepting to work for Avanti). Net-net, it’s really hard to start a Bank. Other candidates for the SPDI are in the process of Wyoming – they plan to serve different markets, and I encourage them!

But I saw that none of them planned to fill the institutional void. There is real customer demand in these markets – real needs are not being met. I have seen this up close and personally (e.g. universities have alumni who want to donate cryptography but face enormous practical obstacles to accept it, foundations recognize that they can no longer ignore an asset class of around $ 300 billion, but realize that there is no custodian yet capable of meeting their high fiduciary standards). So when a group approached me in December to do it, I started to think about it seriously.

Long says that Blockstream is thThe ideal partner to serve large institutional investors who ask regulated banks to provide them with services around Bitcoin in US dollar markets.

Add Long,

“Warning to those who trigger easily: Avanti will bring together strange bedfellows as it will attract the best of the cryptography and traditional worlds. I am comfortable and have deep connections in both worlds and am equally at home in the concrete canyons of New York City as I am in the wilderness of Wyoming.

So don’t be shocked to see people you wouldn’t expect to meet in Avanti.–Not just the best in the traditional world and cryptography worlds, but also rival protocols within crypto. Avanti will be protocol neutral.

Avanti above all will meet the needs of institutional clients. If they want Avanti to take care of cryptoassets other than Bitcoin? Yes, Avanti will maintain them if institutions want it, if our engineers can do it safely, and if we can manage legal and other risks.

Avanti will comply with all United States Federal Know Your Customer, Anti-Money Laundering, Anti-Terrorist Financing and related laws. These are the laws of the land so Avanti will adhere strictly, period. I have long written about why these laws are unconstitutional in their overbreadth but it is the law, so compliance is not optional. Don’t even think about trying to use Avanti for illegal / nefarious purposes! Since Avanti will be critical cryptography infrastructure, we will vigorously defend Avanti’s license and reputation.

Avanti is seeking qualified professionals to join its headquarters in Cheyenne, Wyoming, from Compliance Experts to Banking Specialists. According to Long, the engineering team will be decentralized and not based at Cheyenne headquarters.

 

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