Custodia Bank, an advocate of cryptocurrency, recently unveiled its decision to accept US dollar deposits and has revealed plans to offer Bitcoin custody services for clients within specific U.S. states. The bank is simultaneously rolling out U.S. government money market fund services.
Custodia Bank CEO Caitlin Long expressed pride in gaining approval from bank regulators to accept customer funds. She underscored the challenging nature of launching a bank and emphasized that Custodia had exceeded the stringent criteria.
Long holds that regulated custodians are essential within the industry. She believes that, analogous to traditional securities custody, banks are better equipped for the custodianship of digital assets due to their robust regulatory framework and superior customer protections.
Presently, Custodia’s services are accessible exclusively to business customers, and its operations are gradually expanding across select states. The bank’s approach differs from the traditional “move fast and break things” ethos of the crypto sector. Instead, it values the enhanced safeguards and stability that banks offer.
Despite its current achievements, Custodia Bank continues to challenge the Federal Reserve in court regarding repeated denials of its application to join the FedWire network, a critical component for interbank electronic funds transfers. Gaining access to this network could significantly expand the bank’s capabilities, as it processed over $1 quadrillion in transactions last year.
Long has criticized the Federal Reserve’s actions, characterizing it as an “unmovable mountain” that obstructs innovation. She called out the institution for being “un-American” and for falling short in enforcing the law in its FedNow payment service.
Looking ahead, Custodia is awaiting final regulatory clearance to launch its Bitcoin custody service. This anticipated offering is on the bank’s 6 to 12-month roadmap and aligns with its commitment to bolstering the cryptocurrency ecosystem while adhering to rigorous regulatory standards.
