Former Wall Street veteran and blockchain legislative advocate Caitlin Long announced today she will be working on building Avanti Bank, a special purpose depository institution to provide a range of custody, payment, and securities services to the digital asset industry. Blockstream will be acting as their technology partner to provide the necessary software and hardware to custody crypto. Avanti will be applying for a banking charter, however, unlike most banks, they will keep 100% of deposits under reserves. Earlier this year, the company closed a $1 million seed round and expects to open in early 2021.
Why it matters
A full-service bank is a critical piece of infrastructure that is yet to be fully developed in crypto. In order for major financial institutions such as pensions, endowments or sovereign wealth funds to get involved in this asset class, this type of trustworthy institution needs to exist.
As we saw with the FCoin insolvency, crypto is plagued with mismanagement of consumer funds by exchanges and other service providers. By requiring 100% reserves, Avanti will ensure that the risk of lost funds is properly mitigated.