Custodia Bank CEO Caitlin Long recognizes the negativity that critics have for the cryptocurrency space and Bitcoin BTC/USD, with common misconceptions about the sector.
In an exclusive Benzinga interview, Long shared how Custodia Bank was created with security and compliance to help move the technology forward and differentiate itself from the grifters in the space.
From Law School To Banks: Long started Custodia Bank after years of experience at top banks like Credit Suisse, Solomon Brothers and Morgan Stanley. The banking industry has been Long’s home for years after passing the bar and graduating from Harvard Law School.
“Better with numbers than words,” Long told Benzinga CEO Jason Raznick in an interview on “The Raz Report.”
Long came across Bitcoin in 2012 and started buying the cryptocurrency in 2013, but kept her head down before a manager at Morgan Stanley asked her to dig into the future of Bitcoin.
After leaving Morgan Stanley, Long delved deeper into blockchain technology, which led to the eventual founding of Custodia Bank.
Custodia Bank is a depository institution that offers services to customers, and it's not a lender like many traditional banks. “We’re a bank first and foremost,” she said.
In the future, Long hopes that Bitcoin plays a big part in Custodia Bank’s operations.
“We are about to, knock on wood, launch Bitcoin custody. The purpose of starting Custodia is to bridge the gap between traditional finance and digital assets, specifically Bitcoin.”
Long is a featured keynote speaker at Benzinga’s Future of Digital Assets event on Nov. 14, 2023. Hear directly from leading cryptocurrency experts on what's next for the sector. Get tickets here!
Security And Compliance: Long shared the ways that Custodia Bank is different from other companies in the banking, fintech and cryptocurrency sectors.
“Our motto is security and compliance first,” Long said.
She noted that Custodia is not a lending bank and its assets side of the balance sheet is liquid assets.
“When you’re building something like that you don’t take shortcuts,” Long said, adding that third-party shortcuts are security holes.
She pointed out that blockchain technology can cut the speed of settlement and improve traditional banking and financial services.
“If you’re transacting in a digital asset that’s natively digital from inception, the transaction is the settlement.”
Long said that, unfortunately, the collapse of FTX and other cryptocurrency companies led to a crypto crackdown by the Fed. “Fed threw the baby out with the bathwater.”
She predicted that there are still overleveraged business models that won’t survive, and more businesses could collapse.
Long noted that the Fed is beginning to shift its stance and that several lawsuits against it might lead to changes.
“Maybe it would have been better to work with the players that were trying to do this right,” she said.
Related Link: 30 People To Watch In Web3: Caitlin Long, Ride Or Die For Crypto's Future At A Regulatory Level
What’s Next: Long told Benzinga that programmable money is a vastly superior system and could benefit the financial world. Right now, money transfers are not seamless at all and can’t be programmed or tracked.
“It’s a far better system,” Long said.
She explained that this technology is here to stay, as demonstrated by people’s actions. “People, especially in the younger generations, expect this facility to move money. Some have never stepped foot in a physical bank,” Long said.
The big question is who’s going to be at the back end to power the technology, she said. Noting that it could be the Fed, or banks like Custodia, or it could end up being a nonbank like Circle or PayPal.
“The only people who don’t want it are the banks that benefit from slow payments.”
Long said she hopes that Custodia appeals to the big industry players that haven’t yet touched Bitcoin. The CEO of Custodia Bank emphasized that her company has consistently adhered to banking regulations, maintaining bank-level security and compliance standards.
Long will be speaking at Benzinga's Future of Digital Assets on Nov. 14 in New York City. Don't miss out on your chance to hear directly from the Custodia Bank CEO on the future of Bitcoin and regulations. Tickets are selling fast!
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