Avanti founder and CEO Caitlin Long smiles as the bank’s approval is read out loud. October 28, 2020
Michael del Castillo
Avanti Bank & Trust founder and CEO Caitlin Long was all alone in her Wyoming office today as she tuned into a Zoom chat where her fate, and the fate of a new kind of bank that can handle both dollars and bitcoin, was decided by the Wyoming Division of Banking.
In addition to the eight voting members of the division, 30 other audience members were gathered to watch as chairman Peter Lawton rattled off seven requirements, opened them for discussion, then methodically called out each voter’s name.
Long, a 20-year veteran of Wall Street and former head of Morgan Stanley’s pension advisory group, sat patiently as one-by-one each was approved. Thirteen minutes into the meeting, Lawton formally announced: “The Wyoming state banking board has approved the granting of the Avanti Financial Group Inc special purpose depository institution, or bank for short.”
The milestone is a big one for the bitcoin industry, which has long had difficulty getting traditional bank accounts, and Long, who moved from New York, where she’d called home for years, to Wyoming to help turn it into the Silicon Valley of cryptocurrency. After years of working with state lawmakers to craft the Special Purpose Depository Institution (SPDI) regulations that laid the groundwork for today’s decision, her entry into the space further legitimizes this new breed of institution.
“This is a two and a half year process that has culminated in the vote today,” Long, 51, said. “I really do appreciate the extent to which you dug in and asked us very probing questions and made us defend our position and we really look forward to working with all of you in the future.” In an interview after the vote she added, “It’s a long time coming.”
This is the second SPDI bank to be approved, coming six weeks after cryptocurrency exchange Kraken’s approval in September.
Cheyenne, Wyoming-based Avanti will now be able to take custody of bitcoin and other cryptocurrencies, similar to what Coinbase does, while also holding dollars on deposit at the Federal Reserve, streamlining the process by which cryptocurrency companies that need to cover payrolls and taxes can get traditional accounts.
The news comes on the heels of a number of high-profile milestones in the cryptocurrency world. Late last week, long-time bitcoin skeptic JP Morgan released an investor note giving bitcoin a “considerable” upside relative to gold, followed closely by news the bank had opened a new office dedicated to digital assets. Last week, payments giant PayPal announced it would enable bitcoin purchases in its app and competitor Square announced it has invested $50 million directly into bitcoin.
Currently, the bank plans to launch next year, but still needs to work with Wyoming’s department of banking to obtain the certificate of authority to operate. As evidence of the trailblazing nature of the work—both by the applicants and the regulators—Fred Rife, the interim director of the Wyoming Department of Audit concluded today’s meeting by publicly acknowledging the banking division role “since this idea first came to light a few years ago,” he said, adding: “They’re out on the leading edge and they’re doing things that nobody else in the country’s been asked to do at this point.”