Custodia Bank Account, the safe banking alternative for Bitcoiners and non-Bitcoiners.

My Premise:

• Custodia Bank is a "new" type of non-lending and non-investing bank, where both your crypto and your cash are safe.
• Your deposits are backed one to one with your deposits, so their balance sheet is always balanced. This is guaranteed by strict banking regulator oversight and compliance rules.
• I think Custodia Bank, and banks which follow it's model, may become the bank of choice for both the Bitcoiners and the non-Btcoiners, as both types of customers seek deposit safety for their cash and their crypto in this time of banking uncertainty.
  Custodia Website

Introduction:

• An account at Custodia Bank could be your self custody alternative for bitcoin
• I think an account at this bank can serve as an alternative to self-custodying your Bitcoin and potentially losing your password, your 12 word seed phrase and losing your bitcoin for ever.
• Which makes it a very attractive alternative to both new and some old bitcoin investors.
• But I think this bank is also attractive to non-Bitcoiners also, for the reasons below.

Body

• Custodia Bank is a US Bank in the state of Wyoming.
• Custodia Bank Founder and CEO is Caitlin Long, a Harvard Law School graduate with 22 years of banking experience working for Credit Suisse, Morgan Stanley and Mellon Bank, who has incidentally owned bitcoin since 2012.
• She founded Custodia Bank 4 years ago, iwith the goal of building a highly regulated and banking rule compliant bank, which could serve as the bridge between traditional banking and the cryptocurrency asset class, starting with Bitcoin.
• Custodia Bank is a rare breed of bank called a a Special Purpose Depository Entity, which acts simply as the custodian of your deposited money, doesn't engage in loaning your deposits or investing your deposits, and makes its money from customers only through fees.
• This means that unlike practically every other bank, which makes money on loans and investments of customers deposits, a non-lending banks customers funds are never at risk.
• The US state called Wyoming has passed many cryptocurrency friendly laws over the past couple of years, in an attempt to create an attractive place in the USA for cryptocurrency companies.
• One such law established the rules for a Special Purpose FInancial Entity called a Custody Bank. Which is a non-lending bank, specializing in holding or custodying various assets for it's customers, and doesn't make money through loans or investments, only fees.
• Custodia Bank is an example of a non-lending custody bank.
• • A Custody Bank doesn't lend the depositors money nor invest it.
• • A Custody Bank just custodies or. holds the depositors funds, and Wyoming law states that these funds are not assets belonging to the Bank, and are not able to be seized or encumbered to in the event of a bank failure.
• • This is important because in the bankruptcies of three major banks last year, depositors with large depositors found their funds frozen as bank assets, which would be distributed to all bank creditors equally, mean that only a fraction of their deposits would be returned to them.
• • The realization that bank depositors funds could be seized and used to pay the creditors of the banks which failed was a historical occurrence. It severely undermined consumer confidence in banks and led to customers leaving small banks, and moving their money to large banks, which were perceived as. to big to fail.
• It should be noted that despite her 22 years of banking experience it took Custodia Bank Founder Caitlin Long years to create Custodia Bank, because she was focused on helping craft legislation in Wyoming to support custody banks and define the legal status of cryptocurrency. Then began the task of building a regulatory compliant entity, by working hand in hand with regulators. She called it dotting every "i" and crossing every "t" to build a bregulatorily compliant banking entity. I think she new it was something new and special and she wanted to do it right.

Bitcoin

• Next Custodia Bank applied for and was granted a license to custody Bitcoin for customers also.
• This is a very timely event because of the ever growing number of investors interested in putting small amounts of Bitcoin in their investment portfolio.
• But they are frequently told that they must learn to self custody their bitcoin on a computer, laptop or mobile phone. New and old investors are often advised not to keep their cryptocurrency assest on an exchange, due to the large number of cryptocurrency exchange failures historically and the complete loss of funds that usually happens when the exchanges fail.
• In 2023 that is not an attractive option.
• So since trusting banks is a societal norm, the idea of trusting a bank to custody your bitcoin is the natural thing to do in our society. So I think Custodia's move to secure a Bitcoin Custody License is a brilliant one. Now Custodia Bank is a custody bank, where all laws insure your money is safe, and can't be loaned out or invested, and potentially lost. And you can also invest in this new and complicated asset class called cryptocurrency and store your BItcoin there, and also your Ethereum or other cryptocurrency.

Summary

• I think the structure of Custodia Bank as a business which provides regular banking services like checking accounts and savings accounts, but specifically doesn't make money loaning out or investing your money, is inherently safer for depositors to protect them from bad loans or bad investments a regular bank may make.
• Plus the law in Wyoming specifiying that customer deposits are not bank assets and must be returned immediately to the customers in an event of bank failure is further reassuring.
• Lastly, Custodias smart move to apply for a Bitcoin custody license further sets it apart from the competition by providing a place for investors who are not knowledgeable enough to safely self custody their Bitcoin a safe place to hold it as a longterm or short term investment.
• I think this makes Custodia Bank the bank of choice for Bitcoiners and for non-Bitcoiners, after all who doesn't want to know their money is safe?
• Why have to depend on FDIC insurance, and the Federal government to bail out your bank?
• When instead you can depend on your local bank and banker with whom you have a personal relationship, and the daily regulatory audits making sure your money and crypto are indeed there in your account.
• Custodia is a entity truly built to be safe for your cryptocurrency like Bitcoin and your cash like dollars.
• I know where I want my money. A local custody bank, and if they do crypto wonderful. Lacking that type of bank where I live, I think in the internet age I can have an account at Custodia Bank at one of their regulatorily approve branches in eight other states.
• Custodia isn't standing still, Caitlin Long is spreading this revolutionary concept in banking to other states. One day maybe we will have them in all fifty states.

Last Word

• What do you think?
• Do you want to open an account with Custodia Bank?
• Let me know in the comments?
• I also wonder if Custodia will next partner with Coinbase or some other cryptocurrency exchange so Custodia can become a one stop shop, where customers can buy cryptocurrency and store it in their bank account. Maybe I should do that??

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Custodia Bank Website: https://custodiabank.com/

• Custodia currently operates as Custodia Bank, Inc. in the following states and territories of the United States in YELLOW below: AZ, CA, CO, DC, FL, ID, IN, KS, MA, MD, MO, MS, NH, PR, SC, VT, WY

Custodia operate as Custodia Digital Services, Inc. in the following BLUE states: below AK, AL, GA, MN, MT, ND, NE, PA, RI, TX, UT, VA, WA, WI, WV

Custodia is not currently operating in the GREY states below.

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