WEBVTT - How Traditional Banking Helps 'Crypto Curious'

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<v Speaker 1>This is Bloomberg Business Week with Carol Messer and Bloomberg

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<v Speaker 1>Quick Takes. Tim Stinovic from Bloomberg Radio. Walmart and a

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<v Speaker 1>press release distributor are investigating a hoax tying the retailer

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<v Speaker 1>to a supposed cryptocurrency deal after an announcement later determined

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<v Speaker 1>to be false caused a short lived surgeon light coin

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<v Speaker 1>through a highly unregulated market. According to the release on

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<v Speaker 1>Globe Newswire at nine thirty, Walmart would start letting its

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<v Speaker 1>customers pay with light coin, a relatively obscure instrument that

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<v Speaker 1>isn't even among the top ten cryptocurrencies. That's according to

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<v Speaker 1>coin market cap dot com. Well, let's get into it

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<v Speaker 1>with Brad Scrivener, chief executive officer at Vast Bank, joining

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<v Speaker 1>us on the phone from Tulsa, Oklahoma. Vast Bank is

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<v Speaker 1>the first bank in the country to offer crypto banking. Brad,

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<v Speaker 1>it's great to have you on the show. What went

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<v Speaker 1>through your mind this morning when you saw this news

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<v Speaker 1>later determined to be false. Well, certainly, whenever we see

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<v Speaker 1>something like that, and thanks for having me on the show, Tim,

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<v Speaker 1>I really appreciate being on right now. But you know,

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<v Speaker 1>when you see things like that, you know that crypto

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<v Speaker 1>has certainly arrived, right, I mean for it to pop

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<v Speaker 1>up on the headlines like that, and uh, you know,

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<v Speaker 1>where we are a national bank, we're highly regulated, We're

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<v Speaker 1>going to do the right things and uh, you know,

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<v Speaker 1>for us, I feel good to be positioned where we are,

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<v Speaker 1>uh and knowing that, like I said, we're going to

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<v Speaker 1>do the right things when it comes to the crypto markets.

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<v Speaker 1>But I do wonder if it you know, there's this

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<v Speaker 1>fight for legitimacy I think when it comes to the

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<v Speaker 1>crypto community. And correct me if I'm wrong, but it

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<v Speaker 1>certainly seems like that that fight is continuing, and I'm

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<v Speaker 1>wondering if if this type of thing sets that that

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<v Speaker 1>that fight for legitimacy back. You know, I think you're

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<v Speaker 1>hitting on a really key point here, and some of

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<v Speaker 1>the research shows this right there. There are those crypto

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<v Speaker 1>curious out there, there are those institutions out there, and

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<v Speaker 1>what they're looking for is some certainty. They're looking for

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<v Speaker 1>the things that here in the United States that we have,

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<v Speaker 1>which is, you know, a a legal way to participate

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<v Speaker 1>in these types of things. So that's why as a

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<v Speaker 1>national bank, I think this is a really good thing.

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<v Speaker 1>Those folks that are crypto curious, they would like to participate,

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<v Speaker 1>but they're just not going to go out there and

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<v Speaker 1>open and up an account with someone that that they

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<v Speaker 1>may not know. Uh. You know, we've been around for

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<v Speaker 1>thirty nine years, highly regulated from the Office of the

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<v Speaker 1>Control of the Currency, and I think it's things like

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<v Speaker 1>that that are going to give institutions and individuals greater

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<v Speaker 1>confidence to be able to come into the market to

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<v Speaker 1>the extent that they want to. Well, that's interesting that

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<v Speaker 1>you mentioned that there is this kind of desire for

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<v Speaker 1>for people to use this more broadly. But what's it

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<v Speaker 1>going to take to get that kind of normalcy that

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<v Speaker 1>perhaps the dollar or the gold that other other currencies

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<v Speaker 1>really have here at a time when you do actually

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<v Speaker 1>have some major companies PayPal, Venmo, um Tesla that have

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<v Speaker 1>come out and actually supported the currency. Overstock is another one.

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<v Speaker 1>So how what is it going to take? Who do

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<v Speaker 1>you need the bit from? Well, you know, judging from

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<v Speaker 1>the reaction that we've had since our announcement, you know,

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<v Speaker 1>as the first national bank to to come out with

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<v Speaker 1>this capability to purchase directly from your account, okay up

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<v Speaker 1>to eight current cryptocurrencies, So I think folks are out

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<v Speaker 1>there looking for certainty, and we had people contacting us saying, hey,

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<v Speaker 1>we want to participate, but we were waiting for a

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<v Speaker 1>national bank to get involved because there's this expectation that, um,

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<v Speaker 1>we are highly regulated. We do have people that are

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<v Speaker 1>that are reviewing us regularly. Uh, and in terms of

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<v Speaker 1>our our regulators. So I think this is a really

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<v Speaker 1>really good first up. And when the o c C

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<v Speaker 1>came out with the interpretive letter that said that this

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<v Speaker 1>was an acceptable activity, meaning custody of a of a

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<v Speaker 1>crypto assets, um, you know, that was a really good

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<v Speaker 1>first step. And I think it's good for our country

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<v Speaker 1>to bring this into a regulated banner and people will

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<v Speaker 1>have greater competence. Let me follow that up with asking

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<v Speaker 1>about the bank specifically, how exposed is the bank specifically

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<v Speaker 1>to crypto as opposed to as opposed to simply through

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<v Speaker 1>your clients. Well, when you say exposed to crypto, we

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<v Speaker 1>do not bring on crypto assets directly onto our balance chiefs,

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<v Speaker 1>so there would be no exposure, uh in terms of

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<v Speaker 1>safety and soundness like that. You know, I've used this

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<v Speaker 1>analogy before. Think about, um, you know what's going on

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<v Speaker 1>like a safety deposit box, right, everybody's familiar with that

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<v Speaker 1>inside of your your bank. Well, that's the equivalent of

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<v Speaker 1>like the digital wallet, and those digital currencies inside of

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<v Speaker 1>that safety deposit box are yours, just like if you

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<v Speaker 1>are storing you know, jewelry or whatever the case may

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<v Speaker 1>be inside of a safety deposit box. So the value

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<v Speaker 1>of that going up and down, that is the customer's

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<v Speaker 1>responsibility to understand those pieces, but the bank directly is

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<v Speaker 1>not exposed to that volatility. Let's get right back to

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<v Speaker 1>Brad Scrivener, CEO at Vast Bank. Vast Bank the first

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<v Speaker 1>bank in the country to offer crypto banking. Brad joins

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<v Speaker 1>us on the phone from Tulsa, Oklahoma. Brad, I'm wondering

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<v Speaker 1>this is a the bank has been around since so

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<v Speaker 1>it's not new, even though many people listening right now

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<v Speaker 1>probably haven't heard of it because it is a local bank.

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<v Speaker 1>I'm wondering, as the CEO of the company, how you're

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<v Speaker 1>thinking about turning this bank's local profile into a national

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<v Speaker 1>profile as you adopt cryptocurrency. Yeah. So, uh, we're a

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<v Speaker 1>family owned bank, like have been around thirty nine years

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<v Speaker 1>and at the end of the day, we know customer

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<v Speaker 1>preferences have continued to change. Technology has changed rapidly, so

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<v Speaker 1>we knew we needed to be able to remain relevant

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<v Speaker 1>UH to those ever changing customer needs. And UH we

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<v Speaker 1>may had a partnership that we put in place starting

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<v Speaker 1>in with s A P. So we came the first

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<v Speaker 1>bank in the country to do the S A P

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<v Speaker 1>banking services starting then UH, and then in when Mr

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<v Speaker 1>Brooks and the o c C made the announcement that

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<v Speaker 1>under our charter UH national banks could custody crypto assets,

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<v Speaker 1>we were positioned with a technology stat or excuse me,

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<v Speaker 1>a technology stack that enabled us to pivot and then

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<v Speaker 1>be able to bring forward the custody of these digital

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<v Speaker 1>assets that we're talking about today. Well, speaking of those

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<v Speaker 1>digital assets, I'm wondering right now, what portion of your

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<v Speaker 1>bank is made up of people doing you know, quote

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<v Speaker 1>unquote traditional banking not involving cryptocurrencies, versus people who do

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<v Speaker 1>crypto banking. Yeah, So we've had a really strong uptake.

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<v Speaker 1>We are in all fifty states, UH in terms of

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<v Speaker 1>the digital assets side with with the bank, also in

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<v Speaker 1>the in the territories Puerto Rico, Guam, and d C.

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<v Speaker 1>And we've only been at this for two weeks, so

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<v Speaker 1>we feel really good about that now. Obviously, from a

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<v Speaker 1>revenue standpoint, UH, the traditional bank still UH dominates that

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<v Speaker 1>side of the revenue stream. But we were very pleased

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<v Speaker 1>with with the folks that have come on. And you

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<v Speaker 1>know it's in the app stores right now, so UH

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<v Speaker 1>app Store, Google Play, you can go downloaded and basically

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<v Speaker 1>within five minutes to be ready to go. Where are

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<v Speaker 1>you seeing the entry is coming from? Geographically here in

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<v Speaker 1>the US, where are most people signing up from? You know,

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<v Speaker 1>we're California, New York, UM, Texas, Oklahoma, clearly that's our backyard.

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<v Speaker 1>UH and Florida would be the top five memory right now.

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<v Speaker 1>We've got a real time reporting system that shows us

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<v Speaker 1>as you know. In fact, if you guys wanted to

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<v Speaker 1>sign up right now, I could see it as you

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<v Speaker 1>as you came on. I'm wondering about some other elements

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<v Speaker 1>of the bank just as I go through your website

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<v Speaker 1>here and when I was preparing for this interview, one

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<v Speaker 1>thing that stuck out to me was you offer a

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<v Speaker 1>checking account with two point oh five a p y,

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<v Speaker 1>which is just so much higher than what you see

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<v Speaker 1>anywhere else right now? Is this completely unrelated to the

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<v Speaker 1>crypto portion? Yeah, So if you think about this, I mean,

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<v Speaker 1>we're bank, right, so you've got a dd A portion

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<v Speaker 1>and there are some activities that we want you to

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<v Speaker 1>participate with that on debit card and those those type

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<v Speaker 1>of things. But when you sign up for this mobile

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<v Speaker 1>banking are through the mobile banking app, you get access

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<v Speaker 1>to eight cryptocurrencies to be able to purchase. So, uh,

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<v Speaker 1>you'll see that right on the mobile app. Uh, and

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<v Speaker 1>the ability to do those things. But yes, that and

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<v Speaker 1>I'll just remind folks that that's in f d I

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<v Speaker 1>S A portion ensured portion through that deposit account which

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<v Speaker 1>everyone is familiar with. And then on the cryptocurrency side

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<v Speaker 1>that would be separate from that. Okay, well, let's talk

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<v Speaker 1>a little bit about how you make money and the

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<v Speaker 1>revenue model here. When it comes to the crypto portfolio,

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<v Speaker 1>you offer one percent trading fees. I'm I'm wondering, is

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<v Speaker 1>that the Is that the way you plan on making

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<v Speaker 1>money with this account? Well? Yes, right now that that

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<v Speaker 1>would be an exchange be we partner with coin base

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<v Speaker 1>with the exchange one percent exchange free us D to

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<v Speaker 1>those eight cryptocurrencies. Uh. And then down the road, a

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<v Speaker 1>custodian could be put in place. Uh, and typically that

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<v Speaker 1>would be associated with a cold custody, which that's an

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<v Speaker 1>on offline UH storage solution just to give larger uh depositors,

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<v Speaker 1>are larger folks, holy cryptocurrency greater confidence in terms of

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<v Speaker 1>that hole. What's cryptocurrencies are you seeing as the most

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<v Speaker 1>popular in your accounts? Bitcoin has been the top one

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<v Speaker 1>ethereum and then cardono believe I heard light coin earlier

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<v Speaker 1>was the you know the Walmart announcement. That's that's one

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<v Speaker 1>of them as well, right, the one that what didn't

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<v Speaker 1>end up being we should note it wasn't a real announcement. Yeah,

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<v Speaker 1>that's the fake announce thank you? Right? Yeah? So, uh,

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<v Speaker 1>file coin orchid algorith in bitcoin cash, those are the

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<v Speaker 1>I think I named the eight. Is there one team?

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<v Speaker 1>You know, I think a lot of people this is

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<v Speaker 1>new to a lot of people, and I think a

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<v Speaker 1>lot of people are asking themselves a way to question, wait,

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<v Speaker 1>wait a minute, is it going to be? Is it

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<v Speaker 1>gonna be a bitcoin that's the cryptocurrency that sticks? Is

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<v Speaker 1>it gonna be one of the all coins? Where do

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<v Speaker 1>you fall on that debate? I try not to follow

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<v Speaker 1>anywhere on that debate, and you know, I the way

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<v Speaker 1>I view it is that it's the customers that determine

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<v Speaker 1>the value and the coins that are valuable to them.

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<v Speaker 1>Our job is the bank is the safe keeper, the custodian. Uh.

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<v Speaker 1>We follow their instructions. And these are things that banks

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<v Speaker 1>have done for centuries for customers, and we believe that

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<v Speaker 1>national banks are uniquely positioned to be able to do.

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<v Speaker 1>And and you know, as people are learning about this

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<v Speaker 1>um there are certainly opinions that people have in terms

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<v Speaker 1>of which coin may be a greater store of value,

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<v Speaker 1>which coins are going to be more likely to to

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<v Speaker 1>help facilitate payments or transfer or or those type of things.

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<v Speaker 1>And then like every market and every asset, there's always

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<v Speaker 1>speculators who are coming in and trying to understand and

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<v Speaker 1>take advantage for certain market dynamics to be able to

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<v Speaker 1>have a quick problem. Brad's good. Now we're gonna have

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<v Speaker 1>to leave it there. Brad is CEO at Vast Bank,

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<v Speaker 1>joins us on the phone from Tulsa, Oklahoma. Vast Bank

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<v Speaker 1>the first bank in the country to offer crypto banking. Brad,

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<v Speaker 1>thank you so much for taking the time