In a landmark move, the crypto-amicable bank Custodia has announced that it will now accept dollar deposits and is on the brink of adding bitcoin custody for customers in certain U.S. states. This groundbreaking news also comes with the announcement of the bank offering U.S. government money market fund services to its customers.
What’s the Significance?
The recent development implies that Custodia has secured the green light from its bank regulator to handle customer funds. The bank’s CEO, Caitlin Long, proudly confirmed this news. She accentuated the point that launching a bank requires surmounting a high bar, a challenge that Custodia has successfully overcome.
Long believes that despite the pervasive regulatory drama in the industry, the future lies with regulated custodians, primarily banks. She shared her conviction that banks will ultimately serve as the custodians in this industry, much like how it operates in the securities industry.
Who Can Avail of This Service?
As per the latest updates from Custodia’s Twitter handle, the services are currently accessible only to business customers. The bank is also not yet operational in all 50 states, choosing to roll out its services slowly and cautiously. This approach starkly contrasts the crypto industry’s mantra of ‘moving fast and breaking things’, but Long asserts that banks offer customers superior protections compared to non-banks.
What Lies Ahead?
Custodia is now on the cusp of launching its Bitcoin custody service, with the final regulatory clearance being the only remaining hurdle. According to Long, this service is a key feature on their 6-12 month roadmap. Despite the celebration surrounding the recent announcements, Custodia is still engaged in a lawsuit against the Federal Reserve for repeatedly denying the bank’s application to join FedWire, citing significant safety and soundness risks. Gaining access to the FedWire network would undoubtedly be a significant achievement, given the network processed transactions exceeding $1 quadrillion last year.
For those interested in keeping a close eye on these developments, consider using the cryptoview.io application. It offers a comprehensive view of the crypto market and could be a valuable tool as you navigate these exciting times in the financial industry.
