Speed, Stablecoins and the Future of Payments with Caitlin Long

# Cryptocurrency and Stablecoins

# Banking

A Wall Street veteran and crypto proponent sees stablecoins as an opportunity with real-world uses for corporates.

Stablecoins—along with the entire world of cryptocurrency—have taken some lumps lately. That includes: faltering demand for two prominent players, BUSD and USDC ; risk warnings about the digital coins from Fed vice Chair Michael Barr; and growing scrutiny and concern from the SEC , Congress and the Bank of England .

Does all that mean finance teams at multinational corporations that need to keep up with developments in the payment space should turn their backs on the coins pegged to other assets like the dollar? Absolutely not is the emphatic answer from Caitlin Long , a Wall Street veteran and self-professed “bitcoin evangelist” making a name for herself at the intersection of banking, crypto and the future of payments.

In a video you can watch by clicking the play button below, Ms. Long—the founder and CEO of Custodia Bank—tells the story of a non-crypto company that seized a time-sensitive market opportunity in China and earned $2.6 million by using a stablecoin. That would not have happened if the company had to rely on traditional banking channels, she says.

“This is real-world stuff,” Ms. Long says in the video. She believes this kind of opportunity will become more common, especially with stablecoins available for deposits and withdrawals at non-US banks like Xapo . “If you have an opportunity where you need to move money really fast, you’re going to turn to a stablecoin.”

The promise of Custodia. Ms. Long’s resume includes 22 years of corporate finance experience, with stints at Salomon Brothers, Credit Suisse and Morgan Stanley. She’s a Wyoming native who founded Custodia in her home state in 2020 to function as a safe bridge between the worlds of traditional finance and blockchain-based decentralized finance.

Though not yet operational, the bank plans to function as a non-lending special purpose depository institution , which means it will hold 100% cash reserves. She says that will essentially eliminate any concerns around the counterparty risk of working with a new, small bank.

Custodia Bank has received its certificate of authority to operate as a state charter bank, which allows it to offer custody services for bitcoin and ether, which it plans to launch shortly. But getting approval for also banking US dollars is a separate issue.

To hear more about Custodia, including Ms. Long’s struggle to get the bank’s business model approved by the Federal Reserve, please be on the lookout for an upcoming episode of the Strategic Finance Lab podcast, featuring an interview by NeuGroup founder and CEO Joseph Neu .