BitcoinBusiness

Avanti Becomes a U.S.-Regulated Bitcoin Bank With Unanimous Approval

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Avanti has received a bank charter from the Wyoming State Banking Board with a unanimous 8-0 vote. The approval allows the Bitcoin- and crypto-focused bank the same authority as national banks in the U.S.

The First Digital Asset-Focused Bank in the U.S.

Caitlin Long, CEO of Avanti who previously served as the managing director for top banks Morgan Stanley and Credit Suisse, emphasized the bank’s focal point is to bridge traditional and digital asset financial systems.

Long said Wyoming is currently the only state with a regulatory program for digital assets that is close to completion.

“We will provide products and services that do not exist in the market today. Currently the only type of U.S. financial institution that can provide final and simultaneous settlement of trades between digital assets and the U.S. dollar—because it is the only type currently approved to handle both within the same legal entity—is a Wyoming special purpose depository institution like Avanti. Wyoming has the only U.S. regulator with a bank supervisory and regulatory program for digital assets that is near completion.”

The approval comes after U.S. Federal Reserve chair Jerome Powell publicly discussed the prospect of developing a digital currency earlier this month. 

Albeit Powell expressed a cautious tone towards the short-term outlook on a central bank digital currency (CBDC), the statement showed the overall awareness of Bitcoin and cryptocurrencies has been increasing in recent months.

Atop its usual operations and digital assets custody, Avanti said in its official statement that it is creating a tokenized U.S. dollar named Avit.

Avit would initially be issued on the Bitcoin sidechain Liquid as well as on Ethereum, as the bank gets ready to open for commercial customers in the first quarter of 2021.

A Crucial Milestone For Two Key Reasons

The approval for Avanti to operate as a U.S.-regulated bank is a critical milestone for the Bitcoin industry.

The developments are expected to further strengthen the public’s perception of Bitcoin and cryptocurrencies. Even throughout 2017 and 2018, there were reports of bank account closures related to cryptocurrency users and businesses. Although top U.S. banks eventually took on major cryptocurrency companies as clients, a digital asset-focused bank is a stable option for cryptocurrency users and businesses.

Avanti is creating a compelling alternative to stablecoins. It describes Avit as the “stablecoin disruptor,” as it vows to solve legal and accounting problems regarding previvously existing stablecoins:

Avit is designed to solve widely-acknowledged problems with legacy payment systems faced by traders, investors and corporate treasurers. Nicknamed the “stablecoin disruptor,” it is also designed to solve the legal, accounting and tax issues of stablecoins.

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Joseph Young is a financial analyst based in South Korea. He has covered Bitcoin and the crypto market since 2013. He regularly contributes to the BTC Times, Forbes, and Cointelegraph.