Vast Bank, a $800 million-asset family-owned institution, launched its crypto banking services this summer when it unveiled a platform that allows customers to store and exchange digital assets at the Tulsa, Oklahoma-based bank.

Since launching at the end of August, CEO Brad Scrivner said the new offering has allowed the bank to significantly grow its retail customer base.

"We're probably at about 50% of what it took us 40 years to build, in terms of our retail customer population, in just those eight weeks," he said. 

Customers from all 50 U.S. states and three U.S. territories have opened cryptocurrency accounts with the bank since the launch, representing what Scrivner said is a growing demand for nationally chartered institutions willing to hold digital assets for customers.

"With our initial announcement, we had significant ‘whales,’ meaning very high-net-worth crypto players, contacting us, because right now they have self-custody, where they have the equivalent of hundreds of millions of dollars buried in their backyard," Scrivner said. "Why on earth would you not want to have a national bank involved? Because we are regulated, this is a place where customers can feel more comfortable being able to get involved and have clarity."

The platform, Scrivner said, is also seeing significant interest from a category he calls the "crypto curious" — a demographic that is just beginning to invest in the space. 

"They're wanting to make sure that when they do come into the environment, they feel that it is safe and secure and they trust that the institution is not going to be gone. That has been a really good growth factor for us," he said.  

Vast Bank’s decision to enter into the cryptocurrency space was spurred by an interpretive letter issued by the Office of the Comptroller of the Currency (OCC) last year, which essentially gave nationally chartered banks the green light to provide cryptocurrency custody services, as well as hold unique cryptographic "keys" associated with cryptocurrency on behalf of customers.

"We met with the board and our shareholders, and we made the decision to re-prioritize things, to put the customer first and be able to offer things that customers around the country were asking for, which was a national bank that is safe and sound and that they can trust to be able to participate in this digital asset cryptocurrency world," Scrivner said.

Forward focus

While the OCC letter got the ball rolling regarding the bank’s crypto plans, its long-term vision to offer services to help maintain relevance in the banking space had been in the works for some time, Scrivner said. 

Following the 2008 financial crisis, the bank took stock of the industry disruption that followed and put in place a plan to modernize its technology stack. 

"The family did not want to sell the bank, and so we needed to determine a way for us to remain relevant," he said. "We felt like the best way to do that was to make sure that we were always putting the customer first. Customer preferences, technology and regulation are going to constantly change and we needed to have the mindset, the technology stack and the ability for us to react to all of those changes."

In an effort to modernize its technology platform, the bank partnered with software firm SAP in 2018, a transformation Scrivner said makes Vast Bank compatible with the Payment Service Providers Directive (PSD2), a European regulation for electronic payment services that the European Union began enforcing to boost innovation. 

Vast's partnerships with SAP and Coinbase, the largest U.S. crypto exchange, enable the bank to offer its crypto services, which are available through a new mobile app. 

The bank's customers can buy and sell Bitcoin, Bitcoin Cash, Cardano (Ada), Ethereum (Ether), Litecoin, Orchid and Algorand. 

The bank is evaluating new coins to add to the platform, and plans to merge its legacy app with the newly launched one in the first quarter of 2022, Vast said.

Changing winds?

The shift in the regulatory environment, initiated by the OCC’s interpretive letter, has made a growing number of banks comfortable offering cryptocurrency services. 

The nation’s four largest banks, as well as investment behemoths Goldman Sachs and Morgan Stanley, and custody giants BNY Mellon and State Street, have either cemented or at least announced plans to launch crypto offerings over the past few months. 

A space that was once seen as too volatile or too closely associated with money laundering is becoming increasingly accepted among traditional banks. But that doesn’t mean the current regulatory environment is here to stay. 

The crypto-friendly actions, made by former Acting Comptroller Brian Brooks, a Trump appointee, are being reviewed by the OCC’s current acting head, Michael Hsu, who said in June that, "everything's on the table."

Saule Omarova, a Cornell University professor whom the Biden administration has nominated to helm the regulator, has also indicated skepticism of digital assets. 

Scrivner said he’s confident the need for regulated institutions to service the growing space will remain. 

"Banks for centuries have been safe keepers and custodians of what people value," he said. "That can be currency and that can be physical assets in the case of a safe deposit box. And in today's world, that's now digital assets."