The Clash of Traditional Banking and Cryptocurrency
In the ever-evolving world of finance, cryptocurrency is the rebellious teenager ready to rattle the cage of traditional banking. Caitlin Long, CEO of Avanti Bank and Trust, recently took to social media to fire back at a New York Times article that raised alarms about crypto’s rapid encroachment into banking territories. Spoiler alert: she doesn’t exactly wear the traditional banker’s hat while doing so.
Citing Misleading Claims
Long’s primary contention boils down to one notable phrase: “It’s not black and white.” The New York Times article painted the decentralized finance (DeFi) landscape with a broad brush, singling out firms like BlockFi for their risky antics. According to the article, the frenzy of speculation leads to sleepless nights for regulators. With Long on the offensive, she argues that this narrative fails to recognize the “regulatory-compliant” firms operating squarely within legal boundaries.
Highlighting Regulatory-Approved Crypto Banks
One of Long’s key points includes the fact that regulated crypto banks, like her own Avanti—which took its first steps in Wyoming back in October 2020—already exist. However, she pointedly mentions that Wyoming’s special bank charter doesn’t allow for “cryptocurrency deposits.” Instead, regulated banks can delve into custody services without letting crypto mingle with the fiat currency. It’s like inviting cryptocurrencies to the party, but they can’t share the punch bowl!
Addressing Bad Actors
Just because some crypto firms act like ‘bad boys’ doesn’t mean we should paint everyone with the same brush. Long is not oblivious to the criticisms about leveraged products and lack of transparency often hurled at crypto intermediaries. She recognizes that the bad behavior from traditional finance has found its way into the crypto world, but insists that not all crypto players deserve to be lumped in with those who flout regulations.
Transparency in DeFi vs. Traditional Banking
Interestingly, Long points out that DeFi actually has a transparency edge over traditional banking. Is it time to swap the banker’s pinstripe for a DeFi onesie? While conventional banks settle their balance sheets once a day, DeFi platforms settle transactions within minutes. This, according to Long, showcases the more open nature of DeFi—at least when compared to their more established predecessors.
Political Pushback from Washington
Pit bull Senator Elizabeth Warren is still circling the crypto block, labeling it the “new shadow bank” and eyeing the lack of stablecoin transparency regarding reserves. It’s enough to make you wonder if crypto has become the new punchline in a Senate hearing. Long, however, remains undeterred, insisting on the need for a solution where regulated banks can safely intertwine with the world of crypto without sacrificing security.
