Speaker 1: This is Bloomberg Business Week with Carol Messer and Bloomberg
Speaker 1: Quick Takes. Tim Stinovic from Bloomberg Radio. Walmart and a
Speaker 1: press release distributor are investigating a hoax tying the retailer
Speaker 1: to a supposed cryptocurrency deal after an announcement later determined
Speaker 1: to be false caused a short lived surgeon light coin
Speaker 1: through a highly unregulated market. According to the release on
Speaker 1: Globe Newswire at nine thirty, Walmart would start letting its
Speaker 1: customers pay with light coin, a relatively obscure instrument that
Speaker 1: isn't even among the top ten cryptocurrencies. That's according to
Speaker 1: coin market cap dot com. Well, let's get into it
Speaker 1: with Brad Scrivener, chief executive officer at Vast Bank, joining
Speaker 1: us on the phone from Tulsa, Oklahoma. Vast Bank is
Speaker 1: the first bank in the country to offer crypto banking. Brad,
Speaker 1: it's great to have you on the show. What went
Speaker 1: through your mind this morning when you saw this news
Speaker 1: later determined to be false. Well, certainly, whenever we see
Speaker 1: something like that, and thanks for having me on the show, Tim,
Speaker 1: I really appreciate being on right now. But you know,
Speaker 1: when you see things like that, you know that crypto
Speaker 1: has certainly arrived, right, I mean for it to pop
Speaker 1: up on the headlines like that, and uh, you know,
Speaker 1: where we are a national bank, we're highly regulated, We're
Speaker 1: going to do the right things and uh, you know,
Speaker 1: for us, I feel good to be positioned where we are,
Speaker 1: uh and knowing that, like I said, we're going to
Speaker 1: do the right things when it comes to the crypto markets.
Speaker 1: But I do wonder if it you know, there's this
Speaker 1: fight for legitimacy I think when it comes to the
Speaker 1: crypto community. And correct me if I'm wrong, but it
Speaker 1: certainly seems like that that fight is continuing, and I'm
Speaker 1: wondering if if this type of thing sets that that
Speaker 1: that fight for legitimacy back. You know, I think you're
Speaker 1: hitting on a really key point here, and some of
Speaker 1: the research shows this right there. There are those crypto
Speaker 1: curious out there, there are those institutions out there, and
Speaker 1: what they're looking for is some certainty. They're looking for
Speaker 1: the things that here in the United States that we have,
Speaker 1: which is, you know, a a legal way to participate
Speaker 1: in these types of things. So that's why as a
Speaker 1: national bank, I think this is a really good thing.
Speaker 1: Those folks that are crypto curious, they would like to participate,
Speaker 1: but they're just not going to go out there and
Speaker 1: open and up an account with someone that that they
Speaker 1: may not know. Uh. You know, we've been around for
Speaker 1: thirty nine years, highly regulated from the Office of the
Speaker 1: Control of the Currency, and I think it's things like
Speaker 1: that that are going to give institutions and individuals greater
Speaker 1: confidence to be able to come into the market to
Speaker 1: the extent that they want to. Well, that's interesting that
Speaker 1: you mentioned that there is this kind of desire for
Speaker 1: for people to use this more broadly. But what's it
Speaker 1: going to take to get that kind of normalcy that
Speaker 1: perhaps the dollar or the gold that other other currencies
Speaker 1: really have here at a time when you do actually
Speaker 1: have some major companies PayPal, Venmo, um Tesla that have
Speaker 1: come out and actually supported the currency. Overstock is another one.
Speaker 1: So how what is it going to take? Who do
Speaker 1: you need the bit from? Well, you know, judging from
Speaker 1: the reaction that we've had since our announcement, you know,
Speaker 1: as the first national bank to to come out with
Speaker 1: this capability to purchase directly from your account, okay up
Speaker 1: to eight current cryptocurrencies, So I think folks are out
Speaker 1: there looking for certainty, and we had people contacting us saying, hey,
Speaker 1: we want to participate, but we were waiting for a
Speaker 1: national bank to get involved because there's this expectation that, um,
Speaker 1: we are highly regulated. We do have people that are
Speaker 1: that are reviewing us regularly. Uh, and in terms of
Speaker 1: our our regulators. So I think this is a really
Speaker 1: really good first up. And when the o c C
Speaker 1: came out with the interpretive letter that said that this
Speaker 1: was an acceptable activity, meaning custody of a of a
Speaker 1: crypto assets, um, you know, that was a really good
Speaker 1: first step. And I think it's good for our country
Speaker 1: to bring this into a regulated banner and people will
Speaker 1: have greater competence. Let me follow that up with asking
Speaker 1: about the bank specifically, how exposed is the bank specifically
Speaker 1: to crypto as opposed to as opposed to simply through
Speaker 1: your clients. Well, when you say exposed to crypto, we
Speaker 1: do not bring on crypto assets directly onto our balance chiefs,
Speaker 1: so there would be no exposure, uh in terms of
Speaker 1: safety and soundness like that. You know, I've used this
Speaker 1: analogy before. Think about, um, you know what's going on
Speaker 1: like a safety deposit box, right, everybody's familiar with that
Speaker 1: inside of your your bank. Well, that's the equivalent of
Speaker 1: like the digital wallet, and those digital currencies inside of
Speaker 1: that safety deposit box are yours, just like if you
Speaker 1: are storing you know, jewelry or whatever the case may
Speaker 1: be inside of a safety deposit box. So the value
Speaker 1: of that going up and down, that is the customer's
Speaker 1: responsibility to understand those pieces, but the bank directly is
Speaker 1: not exposed to that volatility. Let's get right back to
Speaker 1: Brad Scrivener, CEO at Vast Bank. Vast Bank the first
Speaker 1: bank in the country to offer crypto banking. Brad joins
Speaker 1: us on the phone from Tulsa, Oklahoma. Brad, I'm wondering
Speaker 1: this is a the bank has been around since so
Speaker 1: it's not new, even though many people listening right now
Speaker 1: probably haven't heard of it because it is a local bank.
Speaker 1: I'm wondering, as the CEO of the company, how you're
Speaker 1: thinking about turning this bank's local profile into a national
Speaker 1: profile as you adopt cryptocurrency. Yeah. So, uh, we're a
Speaker 1: family owned bank, like have been around thirty nine years
Speaker 1: and at the end of the day, we know customer
Speaker 1: preferences have continued to change. Technology has changed rapidly, so
Speaker 1: we knew we needed to be able to remain relevant
Speaker 1: UH to those ever changing customer needs. And UH we
Speaker 1: may had a partnership that we put in place starting
Speaker 1: in with s A P. So we came the first
Speaker 1: bank in the country to do the S A P
Speaker 1: banking services starting then UH, and then in when Mr
Speaker 1: Brooks and the o c C made the announcement that
Speaker 1: under our charter UH national banks could custody crypto assets,
Speaker 1: we were positioned with a technology stat or excuse me,
Speaker 1: a technology stack that enabled us to pivot and then
Speaker 1: be able to bring forward the custody of these digital
Speaker 1: assets that we're talking about today. Well, speaking of those
Speaker 1: digital assets, I'm wondering right now, what portion of your
Speaker 1: bank is made up of people doing you know, quote
Speaker 1: unquote traditional banking not involving cryptocurrencies, versus people who do
Speaker 1: crypto banking. Yeah, So we've had a really strong uptake.
Speaker 1: We are in all fifty states, UH in terms of
Speaker 1: the digital assets side with with the bank, also in
Speaker 1: the in the territories Puerto Rico, Guam, and d C.
Speaker 1: And we've only been at this for two weeks, so
Speaker 1: we feel really good about that now. Obviously, from a
Speaker 1: revenue standpoint, UH, the traditional bank still UH dominates that
Speaker 1: side of the revenue stream. But we were very pleased
Speaker 1: with with the folks that have come on. And you
Speaker 1: know it's in the app stores right now, so UH
Speaker 1: app Store, Google Play, you can go downloaded and basically
Speaker 1: within five minutes to be ready to go. Where are
Speaker 1: you seeing the entry is coming from? Geographically here in
Speaker 1: the US, where are most people signing up from? You know,
Speaker 1: we're California, New York, UM, Texas, Oklahoma, clearly that's our backyard.
Speaker 1: UH and Florida would be the top five memory right now.
Speaker 1: We've got a real time reporting system that shows us
Speaker 1: as you know. In fact, if you guys wanted to
Speaker 1: sign up right now, I could see it as you
Speaker 1: as you came on. I'm wondering about some other elements
Speaker 1: of the bank just as I go through your website
Speaker 1: here and when I was preparing for this interview, one
Speaker 1: thing that stuck out to me was you offer a
Speaker 1: checking account with two point oh five a p y,
Speaker 1: which is just so much higher than what you see
Speaker 1: anywhere else right now? Is this completely unrelated to the
Speaker 1: crypto portion? Yeah, So if you think about this, I mean,
Speaker 1: we're bank, right, so you've got a dd A portion
Speaker 1: and there are some activities that we want you to
Speaker 1: participate with that on debit card and those those type
Speaker 1: of things. But when you sign up for this mobile
Speaker 1: banking are through the mobile banking app, you get access
Speaker 1: to eight cryptocurrencies to be able to purchase. So, uh,
Speaker 1: you'll see that right on the mobile app. Uh, and
Speaker 1: the ability to do those things. But yes, that and
Speaker 1: I'll just remind folks that that's in f d I
Speaker 1: S A portion ensured portion through that deposit account which
Speaker 1: everyone is familiar with. And then on the cryptocurrency side
Speaker 1: that would be separate from that. Okay, well, let's talk
Speaker 1: a little bit about how you make money and the
Speaker 1: revenue model here. When it comes to the crypto portfolio,
Speaker 1: you offer one percent trading fees. I'm I'm wondering, is
Speaker 1: that the Is that the way you plan on making
Speaker 1: money with this account? Well? Yes, right now that that
Speaker 1: would be an exchange be we partner with coin base
Speaker 1: with the exchange one percent exchange free us D to
Speaker 1: those eight cryptocurrencies. Uh. And then down the road, a
Speaker 1: custodian could be put in place. Uh, and typically that
Speaker 1: would be associated with a cold custody, which that's an
Speaker 1: on offline UH storage solution just to give larger uh depositors,
Speaker 1: are larger folks, holy cryptocurrency greater confidence in terms of
Speaker 1: that hole. What's cryptocurrencies are you seeing as the most
Speaker 1: popular in your accounts? Bitcoin has been the top one
Speaker 1: ethereum and then cardono believe I heard light coin earlier
Speaker 1: was the you know the Walmart announcement. That's that's one
Speaker 1: of them as well, right, the one that what didn't
Speaker 1: end up being we should note it wasn't a real announcement. Yeah,
Speaker 1: that's the fake announce thank you? Right? Yeah? So, uh,
Speaker 1: file coin orchid algorith in bitcoin cash, those are the
Speaker 1: I think I named the eight. Is there one team?
Speaker 1: You know, I think a lot of people this is
Speaker 1: new to a lot of people, and I think a
Speaker 1: lot of people are asking themselves a way to question, wait,
Speaker 1: wait a minute, is it going to be? Is it
Speaker 1: gonna be a bitcoin that's the cryptocurrency that sticks? Is
Speaker 1: it gonna be one of the all coins? Where do
Speaker 1: you fall on that debate? I try not to follow
Speaker 1: anywhere on that debate, and you know, I the way
Speaker 1: I view it is that it's the customers that determine
Speaker 1: the value and the coins that are valuable to them.
Speaker 1: Our job is the bank is the safe keeper, the custodian. Uh.
Speaker 1: We follow their instructions. And these are things that banks
Speaker 1: have done for centuries for customers, and we believe that
Speaker 1: national banks are uniquely positioned to be able to do.
Speaker 1: And and you know, as people are learning about this
Speaker 1: um there are certainly opinions that people have in terms
Speaker 1: of which coin may be a greater store of value,
Speaker 1: which coins are going to be more likely to to
Speaker 1: help facilitate payments or transfer or or those type of things.
Speaker 1: And then like every market and every asset, there's always
Speaker 1: speculators who are coming in and trying to understand and
Speaker 1: take advantage for certain market dynamics to be able to
Speaker 1: have a quick problem. Brad's good. Now we're gonna have
Speaker 1: to leave it there. Brad is CEO at Vast Bank,
Speaker 1: joins us on the phone from Tulsa, Oklahoma. Vast Bank
Speaker 1: the first bank in the country to offer crypto banking. Brad,
Speaker 1: thank you so much for taking the time