Bitcoins and dollars are like oil and water—but financier Caitlin Long says she can blend them inside one novel institution domiciled in Wyoming.
ight years ago, Caitlin Long was a card-carrying member of the financial establishment. As head of Morgan Stanley’s pension advisory group, she oversaw the retirement funds for dozens of employers. The dust from the impact of the Great Recession, which wiped out billions of dollars in market value from her clients, was just beginning to settle.
In spite of bitcoin’s promise to let investors own their own assets, Long trusted the exchange with her password, and when it lost $500 million a year later, some of her investment vanished too. Not long after, a client of hers, a pension fund for 30,000 people had a similar experience. She discovered that several billion dollars in bonds listed on the account statement weren’t available for sale. While Mt.
Long, 50, is the daughter of a professor of electrical engineering and an elementary school teacher who taught the children of miners. She earned a bachelor’s degree in political economy at the University of Wyoming, which she proudly declares has been “bucking the system since 1866.” As an undergrad, she joined in the state of Wyoming’s fight against a federal push to raise the legal drinking age.
This year Long cofounded an enterprise that aims to get the first of those charters. If all goes according to plan, Avanti Bank & Trust will open up sometime next year, with an office in Cheyenne and the right to do business in at least 40 states. Part bitcoin custodian, part traditional bank, Avanti aims to be able to take custody of cryptocurrencies the way exchanges like Coinbase do while also holding dollars on deposit at the Federal Reserve.
already in the works. “We’re moving to a financial system, where solvency is really going to matter again,” she says. “And provably solvent financial institutions are ultimately going to win in the marketplace.”As a result, Long thinks that banks like Avanti, that don’t lend out depositors’ money, could prove attractive even to clients that don’t deal in crypto. Instead of making money by lending money, Long says, Avanti will charge fees for services.
Perhaps the largest obstacle to Avanti’s success is technology. Bridging a crypto trust to a U.S. bank, and then connecting that bank directly to the Federal Reserve, is no small feat. While Long and her cofounders write the state charter application, chief technology officer Bryan Bishop is hard at work on how to securely link Avanti to the Fed and to repositories of cryptocurrency.
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