Avanti Financial Group founder & CEO Caitlin Long says the latest crypto and banking breakthrough spearheaded by the Office of the Comptroller of the Currency (OCC) has implications that are far more reaching than most in the crypto industry understand.
In a new episode of The Pomp Podcast, Long highlights the importance of the banking regulator’s declaration that banks are legally allowed to custody cryptocurrencies.
“It’s a big deal and it’s a bigger deal than most folks in the crypto industry understand… This announcement yesterday or two days ago now absolutely changes everything. As of two days ago, national banks can custody digital assets and it is what it is. They do not need to go through a special process unless this is a material part of their business.”
Long says the announcement not only applies to national banks but to state banks as well, even if they are not directly mentioned in the letter.
“Only a relatively small fraction of the number of banks in this country are regulated by the OCC. The OCC regulates national banks and then there are 50 state regulators that regulate state banks. At the end of the day, they are not different. There is maybe a perception that a national bank has an advantage just because it is national, but here is the difference. State banks have the exact same master account at the Federal Reserve that a national bank has. They can do the same things and state member banks by law can do everything that a national bank can do.”
In the near-term, Long believes crypto companies could be negatively affected by this decision because of the need to go through the lengthy process to acquire a bank license.
“The entire landscape in the US just shifted and now you need a bank license in order to be competitive, that’s the bottom line…
If a bank can custody crypto, particularly if it is one of the big guys, all the native crypto companies now need to get bank licenses… It is not like folks weren’t warned… It takes nine to 12 months to get a bank license… It is an unbelievably difficult process.”