Caitlin Long, CEO of Avanti Bank and Trust, responded to a recent New York Times article
Avanti bank and Trust CEO Caitlin Long posted a response to a recent New York Times article saying that crypto and decentralized finance is “disrupting the banking industry” in a distinct pace the regulators can’t keep up.
Destroying traditional finance is what crypto and DeFi is trying to do but the piece called “crypto’s rapid move into banking Elicits Alarm in Washington” published on September 5. Had a lot of mistakes in it based on longs observation. The first argument was the usage of DeFi startup BlockFi as an example was that crypto derivatives and highly leveraged products have turned into a difficult situation for regulators which are trying to reach this stage. Long stated that the issue suggested “anti-crypto forces” are making an attempt to paint the entire industry with the same brush. “Bad actors deserve to be called out, but the article ignores the fact that regulatory compliant firms exist,” she said.
According to her Wyoming’s special bank charter does not permit “cryptocurrency deposits.” Regulated banks give custody services for crypto. “Article missed that critical point it’s a firewall protecting Fed’s payment system from exposure to anything other than USD $.”
The article also mentioned that many crypto intermediaries have brought some of the unwanted “bad behaviour” from traditional finance such as extreme leverage without requiring capital buffer. These are some criticisms which previously warmed about leverage says Long. Long mentioned that Defi platforms can do a better job with transparency than crypto intermediaries or traditional banks which remains one of its best attributes. Banks close their accounts in a day while crypto does it in a minute. “Regulated banks that handle crypto need to be in a straightjacket. That’s the only safe and sound way to integrate the crypto and traditional systems.”