Bitcoin, Ethereum, Cardano, Filecoin, Litecoin, Orchid, Algorand and Bitcoin Cash are eight cryptocurrencies now available for purchase directly from an FDIC insured checking account if you are a customer of Vast Bank, NA According to CEO Brad Scrivner, the bank’s decision to offer the crypto was approved by the OCC, but also included discussions with the Federal Reserve. Vast Bank, NA is now the first federally chartered bank in the United States to offer the ability to buy, sell and hold cryptocurrencies – directly from a checking account – all under one roof.
âThis is great news for the cryptocurrency community. It has always been difficult for digital asset companies to even get banking services, let alone have a bank that provides digital asset services. I see this as a step in the right direction, and I suspect we will see more banking / digital asset businesses in the future, âsaid Judith Rinearson, partner at K&L Gates, a legal expert who helps navigate many cryptocurrency customers.
Irina Berkon, CFO of Metallicus, a US-based cryptocurrency exchange, commented: âThe application of blockchain technology has grown, especially in the financial services arena. Appropriate, thoughtful and progressive regulation is essential to promote legitimate use cases for digital assets. I am so happy to see the Vast Bank opening its doors to the unbanked population of crypto holders, blockchain development companies, innovators and creators who benefit from strict regulation from a financial institution.
I was fortunate enough to interview Scrivner who shared Vast Bank’s journey in what is today the first OCC-regulated bank to allow customers to buy crypto directly from their bank accounts. He credits both the growing popularity of crypto and his understanding of the technology that has allowed his organization to be nimble enough to move into the world of crypto custody.
Scrivner claims that a national bank is the best place to buy and sell cryptocurrency. “We know the regulations well, we’re going to do the right things, we’re going to do things to make sure the financial system stays safe,” Scrivner said.
Regarding the types of customers who would come to his bank to buy cryptocurrency rather than an exchange, Scrivner said, âThere are a lot of different customers who may want to control everything and have their own wallet, their own. own access codes, and then there are those who are curious about crypto and may prefer to work with a bank or an intermediary, simply because they do not understand very well.
Below is my interview with Scrivner of Vast Bank, the first federally chartered bank to offer both custody and exchange of crypto directly from a bank account.
Jason brett: Welcome. I’m really excited to tell you today about a huge announcement that was made following an initial announcement regarding the bank’s successful January test of a cryptocurrency purchase with US dollars in a Bank. Could you tell us a bit about what your bank was interested in dealing with cryptocurrency?
Brad Scrivner: The decisions involved how [Vast Bank] was trying to stay relevant to what we thought were ever-changing customer preferences. We also believe that the technology enabled the client in a way that hadn’t really been activated in the financial services industry before, and that cryptocurrency was going to be very disruptive in financial services. And so for us, we’re a family business and we wanted to make the decision to have a platform in place, and also to have the people in place where we could adapt quickly to customer demands.
Brett: What triggered the start of the cryptocurrency custody test process in your bank?
The context that led to the cryptocurrency decision was prompted by the announcement of the OCC by Mr. Brian Brooks in July 2020 when he announced that with a National Bank charter we could keep the crypto assets. We brought together our shareholders and our board of directors and looked at the business cases. And we decided to go ahead and shift away from some of the other things we were doing and prioritize crypto in our work.
Brett: Were blockchain and cryptocurrency new to you and your bank? Was it on your radar before Brian Brooks’ announcement?
Scriver: Yes – blockchain was something I had known about since 2009. Starting in 2016, we were discussing with our shareholders what disruptions we thought were going to happen and how I was feeling. massive consolidation in the field of financial services. We spoke to our shareholders about blockchain use cases that we believe may exist, such as trade finance, cross-border payments, or currency exchange for our bank. The time spent understanding the technology has allowed us to be agile enough to pivot and prioritize cryptocurrencies.
Brett: You’ve brought world-class partners to the table like Coinbase, which is America’s largest exchange, and also SAP. What can you do about these partnerships and how did you bring everyone together to make it happen?
Scriver: As you can imagine, implementing this technology is not easy for a relatively small bank. SAP is historically at least considered one of the world’s largest companies serving the financial services industry. They believed in what we do and have been great partners. Along with Coinbase, it was an introduction from one of our FinTech partners. Coinbase thought this was a great opportunity for a bank to serve segments of their customers and different types of customers. And they continued to be a very good referral partner to encourage people to talk to us about the child care option.
Brett: What Kind of Market Research Did You Do Before Getting Into Cryptocurrency?
Scriver: A Gallup poll and our own internal surveys have shown us that over 60% of people are at least interested in crypto – what I like to describe as “curious crypto.” But they also say we want a bank to be involved in our cryptocurrency custody. After our announcement in February of our successful test, we had a major âwhaleâ in the industry contacting us because they were specifically waiting for a national bank to get involved.
And why is that? Well we are highly rated, we are going to do the right things. We’re going to do our checks, we’re going to do our due diligence to get a national bank involved. I can stand up very quickly on this subject. That’s why the challenging world should embrace this and we have to work together, right? There are a lot of different clients, from the more sophisticated who may want to control everything and have their own wallet and pass codes, to those who are “crypto curious” and may prefer to work with a bank or an intermediary, simply because they don’t quite understand. And we know the regulations well, we’re going to do the right things, we’re going to do things to make sure the financial system is safe and sound.
Brett: Can you tell us a bit about the range of services that people can now take advantage of in your bank?
Scriver: We launched crypto services for consumers as a âself-serviceâ capability. When customers fund a normal bank account, you have the option of purchasing eight cryptocurrencies, simply by signing up for that account. When asking about custody and trading, you can buy, you can sell, and you can store these eight cryptocurrencies by opening a single bank account. Now, technically behind the scenes, each of these cryptocurrencies is in a different account, but it’s displayed on your mobile device so that you understand what you have in each of those coins – but it just sets in and goes out right away. from your bank Account. So there is instant settlement to your checking account when you sell cryptocurrency or instant settlement to buy cryptocurrency as well.
Brett: What are the eight cryptocurrencies offered by your bank?
Scriver: Bitcoin, Ethereum, Cardano, Filecoin, Litecoin, Orchid, Allgerand and Bitcoin Cash.
Brett: If I had Bitcoin that I had already purchased, could I transfer it and have Vast Bank as a custodian?
Scriver: Not yet. It’s on our roadmap and we are actively working on it. And I promised my team that I wouldn’t give a deadline on this – I would love to give a deadline. But you’re a former regulator, so you get it – a lot of people don’t get it. We are required to understand the source of funds in a bank. All funds go through the KYC process and our BSA and AML program, which allows us to understand the type of activity to expect on an account. If we think of the Poly network hack that just happened. The part that interests me the most is that obviously this person was involved in the KYC process somewhere, right? And due to the nature of the blockchain, all of a sudden there was some traceability to be able to identify that person. Whereas if he was a bad actor, he had to, say, come back. There are other cases where the parts are gone and things like that. As regulated entities, we are committed to doing the right thing. Part of this is understanding where these parts come from. And in order to do that, we have to have the tools in place and the people in place to be able to do the right KYC / BSA / AML activity. And in order to do that, we need to have the tools in place to analyze the chain. This is the process, we have already selected our partners, we have the contracts in place. We support this program, but as you know there is a big difference between deciding to do something and operationalizing and scaling it up. There are a lot of new, wealthy people and let’s face it some of the early adopters are walking around and I don’t know how they sleep at night, you know, with their wallets, right? It’s the equivalent, you know, of the risk of their house burning down. And all their money is stored under the mattress. You know, that’s why there is so much interest in a national bank coming in. People are tired of burying their money basically in the garden and worrying that it will be stolen or whatever. in itself.
Disclosure: I hold Bitcoin in my financial wallet and am also an advisor to Metallicus, Inc.