1/ GAME ON! The @USOCC's announcement that it's following #Wyoming by allowing national banks to custody #digitalassets is GREAT news for #crypto! Long overdue & hopefully will help U.S. regain ground it lost to other developed world countries by dilly-dallying for so long.

2/ Winners=customers & #crypto VCs. This will spur M&A boom as US banks acquire #digitalasset custodians. Most must sell bc:
a. trust co. charters now obsolete &
b. #BitLicense now obsolete

bc @USOCC leapfrogged 'em. Custodians now MUST have a bank charter to be competitive.

3/ But @USOCC didn't leapfrog #Wyoming, bc we already offer a bank charter.

What's the distinction? A bank license was **ALWAYS** the optimal US regulatory structure for crypto custodians--not a trust charter or #BitLicense. Bank charters are SO much better for #crypto custody

4/ Why? Many reasons.

*Banks can do all kinds of things that non-banks can't do, mostly bc ONLY banks have direct plumbing into US dollar payment systems. This is why it's SO much harder to get a bank charter than a trust co or money transmitter license (+takes 9-12 months).

5/ *Banks MUCH better capitalized (trust co. minimum capital requirement $100,000 in one state, $1 million in another. But for banks it's ~$25 million!!! Massive difference).

*Banks have much stricter prudential oversight (more rules, regular exams in deep detail, audit rqmt).

6/ Ask your trust company how many times they've had a regulatory exam (hint-most haven't, ever).

*Banks have direct access to the Fed--indeed, this is why big securities custodians are all banks (bc institutional investors value this!)

*Banks have clearer rules in bankruptcy

7/ In bankruptcy, bank regulators must respect segregation of assets. By contrast trust cos are subject to the US Bankruptcy Code where judges can break contracts & break your asset segregation at the very time it really, really matters to you.

I'd add more...but u get picture.

8/ It was **ALWAYS** the case that bank licenses would evolve as preferred regulatory structure for #crypto cos in the US. Trust cos=! I figured all this out 2 years ago, when the #Wyoming #Blockchain Task Force started looking at creating a #bank that could custody crypto.

9/ Back then I had no plan to start a bank--wanted others to do it (it's wide open to all). Many tried. But it's REALLY hard to start a bank. So here I am at @AvantiBT.

#crypto needs a bank--not the bad kind, but a native co that happens to have a bank charter. HUGE difference.

10/ Soon, @AvantiBT will update you on where we stand. It has been a REALLY heavy lift but we're almost ready--our charter application has been accelerated & we should be open in ~Oct. We'll release a few details on what we're up to--doing things in crypto that ONLY a bank can do

11/ Example: @AvantiBT has a new product to modernize US dollar payments, which legally only a bank can issue. Called #Avit, it's nicknamed the " #stablecoin disruptor." It's not a security & will prob be treated as a cash equivalent (a v. BIG DEAL!!). It offers legal certainty...

12/ ...bc it will be issued under existing US commercial laws. Programmable via Avanti's user-friendly API, #Avit is ideal for use by institutional traders & corporate treasurers who want real time settlement of US dollar payments. More details in our forthcoming press release.

13/ #Avit has been thru the regulatory wringer. It has no comparable in the market today, nor will it, #probably. Anchored to public #blockchains, it's better than a #CBDC.

All this is good for #crypto. Again, its service providers should have bank charters for very good reasons

14/ But, do I worry about the @USOCC announcement?

Yep, I worry it's not possible for a bank to custody #crypto in a safe & sound manner anywhere in the US except in #Wyoming.

15/ Why? Bc neither the OCC nor the other 49 states yet have the necessary comprehensive legal structure in place. That legal structure must cover commercial law, property law, tax law & banking regs. Only #Wyoming has clarified all these & most are state (not federal) laws.

16/ Yep, there's significant legal risk to transacting in #crypto in US bc commercial law treatment of many #cryptoassets is unclear (esp if one party to transaction isn't an intermediary). Are transactions legally enforceable??? This is a BIG impediment to institutional adoption

17/ And how many regulators are ready to supervise #crypto? Answer: exactly one. Only #Wyoming has a comprehensive framework & supervisory manual--it doesn't exist elsewhere yet. It's coming in other states and at the @USOCC, for sure, but it's gonna take time. It requires...

18/ ...commercial law ( #UCC) & tax law clarifications & #digitalasset custody rules + a supervisory manual for regulatory exams. Only #Wyoming has all this already--which is why I believe it's the only place where crypto custody can be done in a bank in a safe & sound manner.

19/ In closing, I've been thinking a lot about the big banks getting into #crypto since 2012 (& was part of a big bank's #blockchain working group 2014-16). There are HUGE differences between traditional financial institutions & #digitalasset cos. It's cultural but it's more too.

20/ It's also big differences in skill sets. The system architectures of trad. banks & crypto are polar opposite. Trad banks have centralized architecture--they own all data & reconcile against counterparties; they use firewalls but data behind firewalls generally not encrypted.

21/ By contrast, #crypto architecture is fundamentally decentralized; all data is shared, there are no firewalls & all data is encrypted. This is a totally diff. skill set & mindset. If the right team to bridge this huge divide hadn't joined, I wouldn't have started @AvantiBT.

22/ There's too much risk for big banks to build #crypto custody on their own (tho some will try). The big banks generally know this, tho, which is why I believe an M&A boom is abt to start in the industry--bc many will choose to buy instead of build. And the sellers need to sell

23/ Why? bc banks can do so much more than incumbent (non-bank) #crypto custodians can do--plus banks offer better legal, capitalization & bankruptcy protections to customers. Example--only banks can settle #crypto & US dollars simultaneously.

I love where #Wyoming is here.

24/ Wyoming was ahead when we invented the LLC in 1977 (at first everyone ridiculed us, then they copied us), & when we gave women the right to vote 150 yrs ago (at first everyone ridiculed us, then they copied us). #Wyoming isn't afraid to lead. The pattern keeps repeating.

PS- @mikejcasey, see #11. Forgot to tag u. When I listened to ur @laurashin podcast w/ @nfergus, I abt fell out of my chair at the end bc u described #Avit almost to a tee--but I don't think u knew about it. Yep, it's already far down the reg path. Something about great minds...