Many finance professionals at multinational corporations remain skeptics about cryptocurrencies, including stablecoins. No wonder: Fraud charges tied to the collapse of FTX as well as two stablecoins losing their dollar pegs—Terra and USDC—have fueled well-founded fears about the world of digital assets in the last year. But that’s not the whole story.
To help shed more light on what can seem like an opaque, complicated topic, Caitlin Long, founder and CEO of Custodia Bank, joins NeuGroup founder and CEO Joseph Neu in the newest Strategic Finance Lab podcast. She shares her belief that the worlds of traditional finance and blockchain-based decentralized finance, or DeFi, are at an inflection point—and how a bank like Custodia could serve as a bridge between the two.
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.
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.
