Avanti promises to bring Bitcoin ethos to banking

Long’s new company Avanti, which means "ahead" in Italian, is planning to create a bank that is consistent with the "not your keys, not your coins" ethos of Bitcoin.

By building on Wyoming’s pioneering blockchain legal framework, and partnering with Blockstream for institutional-grade custody, Long hopes to create a bank that will stay true to the ideals of Bitcoin but also make it possible for institutions to enter the space.

The first American crypto-friendly bank

Wyoming’s special-purpose banking legislation—the SPDI charter—offers a unique opportunity for cryptocurrency companies wanting to bridge the worlds of banking and crypto.

This legal foundation, said Long on the Breakdown podcast, will help her to bring cryptocurrency to institutional investors like "endowments, pension funds, foundations, and sovereign wealth funds," that "need a higher level of service that doesn’t exist in the U.S. market right now."

As she illustrated with the parable of a university unable to handle a large donation in cryptocurrency, these institutions are not held back by a lack of interest, but a lack of infrastructure.

Instead of replicating the traditional creditor/debtor relationship as traditional commercial banks, Long plans to use Wyoming’s unique legislation to build a bank aligned with Bitcoin’s ethos.

Cryptocurrency is to be turned over to the bank for safekeeping, not possession. This reflects the bailment model of valet parking or coat checking where assets are held on behalf of the owner, but without the right to control them, or rehypothecate them in the case of banks.

"Wyoming paved the way for such banks to exist via its special-purpose depository institution (SPDI) law, which is the optimal regulatory-compliant structure in the US for providing financial services around #crypto," tweeted Long.

Avanti has already raised $1 million in seed funding and reportedly has eight unique financial products for institutions in the pipeline, including a custody solution for security tokens.

Meanwhile, other companies are applying for Wyoming’s SPDI charter in a bid to build their own crossover banks.

This reflects a broader trend of Bitcoin inspiring the creation of alternative financial institutions, as also seen in Malta where exchanges have teamed together to build their own crypto-friendly bank: The Founder’s Bank.