Crypto-friendly bank Custodia announced Friday it’s now accepting dollar deposits—and will soon custody Bitcoin—for customers in select U.S. states. The financial institution is now also providing customers with U.S. government money market fund services.
What does this mean? “We got our bank regulator’s approval to take customer funds,” Caitlin Long, Custodia’s CEO told Decrypt. She emphasized that “The bar is very high for banks to launch, and we cleared it.”
For Long, despite the fact there is “a lot of regulatory theater in the industry,” the need for regulated custodians–namely banks–is the way.
She told Decrypt that “Custodia has always believed the custodians in this industry will ultimately be banks–for the same reasons that the custodians in the securities industry are banks, not trust companies or other non-bank entities.”
According to the company’s Twitter account, Custodia is only available to business customers as of right now, and is not ready to operate in all 50 states–posting that they are opening “slowly and carefully.”
The route that Custodia is taking is the opposite of the crypto industry’s ethos of “moving fast and breaking things,” says Long–due to the fact that “banks offer customers superior protections to non-banks.”
Today’s announcement was drenched in a celebratory tone, noting that they have completed a long list of tasks which aren’t even required anymore.
Although Custodia takes the win today, it is still currently pursuing a lawsuit against the Federal Reserve over the its repeated denial of the bank’s application to join FedWire—citing significant safety and soundness risks.
Getting access to the FedWire network, however, would open the doors to a network that processed more than $1 quadrillion in transactions last year.
Long has previously told Decrypt that the Fed has become an “unmovable mountain,” calling out the institution for being “un-American” and “not enforcing the law” in its new FedNow payment service.
What’s to come? According to Long, Custodia is “just awaiting” final regulatory clearance to launch its Bitcoin custody service, which
“It’s on our 6-12 month roadmap,” she anticipated.
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