OPINION: Crypto is not illegal, so a fully reserved, chartered bank looking to provide financial services to crypto companies, like custodiabank, should not be blocked from doing so. gckaloudis writes in response to issues at binance, JunoFinanceHQ.
including fraud, scams and inaccurate disclosures by crypto companies. The statement also cited other things including legal uncertainties related to custody practices, market volatility, stablecoin run risk, contagion risk and – my personal favorite – “risk of open, public, and/or decentralized networks or similar systems.”
Where it becomes unreasonable is when you consider Custodia’s stated strategy and mission and this sentence from the Fed’s rejection: “It is important that risks related to the crypto-asset sector that cannot be mitigated or controlled do not migrate to the banking system.”Wyoming-chartered Special Purpose Depository Institution
, which means it is a bank mostly engaged in the custody of assets, with its main focus on keeping assets safe and settling transactions efficiently. Very critically due to this designation as a SPDI, Custodia would be required to maintain unencumbered liquid assets valued at 100% or more of its deposits. For every dollar of deposits from its customers, Custodia would have at least one dollar in reserve.Federal Deposit Insurance Corporation Although that sounds petrifying, it isn’t.
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