Caitlin Lengthy is a rarity within the crypto world: A banker with 20 years of Wall Avenue expertise who noticed the promise of Bitcoin early on, and left to construct a crypto banking startup of her personal. When she talks about banks and the way forward for finance, individuals pay attention.
On the newest episode of Decrypt‘s gm podcast, Lengthy supplied an attention-grabbing take: JP Morgan, whose CEO is legendary for bashing Bitcoin, has not too long ago had extra success in crypto than Goldman Sachs, a financial institution higher identified for innovation and monetary razzle-dazzle.
“Goldman, within the early years of crypto, was the financial institution that was probably the most open to it. Culturally, there’s one thing about Goldman that permits and fosters innovation, whereas I didn’t really feel that at my earlier banks,” stated Lengthy, who spent years at Credit score Suisse and Morgan Stanley. And but, “JP Morgan ended up flipping and changing into much more open to it than Goldman was,” she stated.
Goldman Sachs is at the moment greatest identified within the crypto world for repeatedly saying splashy crypto ventures however then shutting them down. Most famously, in 2018, the financial institution launched a buying and selling desk (staffed by multiple men with man buns) however closed it down quickly after.
Lengthy observes that this hesitation has brought about Goldman—which jumped again into crypto but once more final 12 months—to take a backseat to JP Morgan, which has been deeply concerned in crypto for years, albeit quietly. Even after CEO Jamie Dimon famously referred to as Bitcoin a “fraud… worse than tulip bulbs” in 2017 and snarled that he would hearth anybody “silly” sufficient to commerce Bitcoin, the financial institution has developed a well-regarded crypto unit that has experimented with Ethereum and stablecoins.
The irony of JP Morgan build up this workforce after its chief vehemently denounced crypto is just not misplaced on Lengthy.
“I believe he understands that the outdated system is dying,” she stated. “It is gonna battle to the loss of life, as a result of plenty of banks can’t afford to do what he is accomplished, which is rent a whole lot of individuals and create their very own crypto unit.” However all the large banks, Lengthy added, have been “extra concerned all alongside than they have been given credit score for, it is simply that they had been certainly on the market saying, ‘Do not become involved in it for those who work right here.’ And I definitely had that that impression at Morgan Stanley.”
Due to her personal expertise at Morgan Stanley, Lengthy stated she wasn’t shocked by Dimon’s contradictory statements on crypto. She remembers Morgan Stanley’s CTO phoning her up in 2014—nonetheless the early days of crypto—and asking her to clarify Bitcoin. That request became a two-year instructing session with 5 of Morgan Stanley’s high individuals. Lengthy relished the expertise.
“[The CTO] was so skeptical, and I cherished working with him as a result of he actually pressured me to be taught and justify and perceive the place he was coming from,” she stated. “And it really helped solidify my very own views of particularly Bitcoin however however crypto extra broadly.”
Right this moment, in fact, each financial institution value its salt is maintaining with crypto, together with Goldman Sachs. Lengthy notes that the financial institution’s present effort is being led by a “very, very senior companion, the man who ran the repo desk, which is the the core desk of any large funding financial institution”—a sign Goldman intends to make up for misplaced time.
Regardless of the large banks find yourself doing in crypto, they’ll doubtless should contend not solely with one another however with rivals like Lengthy, whose startup Custodia Financial institution (previously referred to as Avanti Monetary) goals to make use of stablecoins to offer corporations with easy-to-use crypto-based monetary instruments. Custodia can also be on the cusp of changing into one of many first crypto corporations to be granted entry to the Federal Reserve.
Lengthy additionally talked about crypto tradition, recognized herself as a “Bitcoin maxi,” and predicted crypto will cut up into three camps with completely different views on regulation. Take heed to the complete episode wherever you get your podcasts.