Statement from Caitlin Long, founder/CEO and Rich Radnay, CTO of Custodia about Custodia’s comment letter to BIS regarding bank capital requirements for digital assets:
“It is a fact that legacy payment systems are already in competition with internet-native payment protocols, which enable their users to settle payments outside banking systems. By one estimate, to date approximately 3% of U.S. bank deposits have already migrated to the crypto industry – and that happened mostly before technology to scale these protocols arrived. But it has now arrived (it’s called the Lightning Network, which is a Bitcoin layer 2 protocol. Its throughput capacity roughly equals that of Visa, and payments made over Lightning cost virtually zero). This means regulations implemented today that block banks from adopting the new protocols, as they scale and as customers increasingly demand them – including to use them as payment rails for fiat currency – could turn out to have the unintended consequence of costing the banking industry dearly, as fintechs and broader technology companies simply go around banking systems to settle payments.”
Download the full comment letter