The crypto markets seem to be showing signs of more than a seasonal reset with the inflated economy. The last major downturn was in 2017 when Bitcoin lost nearly half its value (from $19,783.06 to below $11,000) in just five days. By the time the volatile market fully recovered some 24 months later, many crypto projects had folded but others were just getting started.
Enter Proton Blockchain (not yet two years old) that already has a suite of products built around an amazing ecosystem; which includes the features of Web3 connectivity (WebAuth.com); cross blockchain swaps (ProtonSwap); yield farming (farming pools); and the latest addition–ProtonLoan–a completely trustless DeFi platform that enables the borrowing and lending of cryptocurrency all using Proton's uniquely efficient model of zero gas fees, combined with its own xtokens (wrapped versions of some of the most popular crypto currencies). To fully understand the end goal for Proton Blockchain, one needs to follow the recurring theme of the messaging used by Protonchain CEO Marshall Hayner on social media:
Instead of waiting for the perfect regulatory climate in which to launch a nationally chartered FDIC insured bank, the tweet above (on January 23, 2022) indicates that Marshall/Metallicus will likely apply for a SPDI license in a single state. Why? Because it will expedite the creation of a bank while they can still enjoy a first-mover advantage. Remember only FBB&T can claim to have a bank that runs on their own blockchain (like Protonchain) and feature their own wrapped xtokens. There are many reasons why Protonchain's “First Blockchain Bank” will open next year and why choosing the right location matters.
This goal to be the First Blockchain Bank and Trust (FBB&T) is the long game for Proton and Metal Pay owned by parent company Metallicus. Hayner is firmly at the helm of both enterprises synergized together through a series of updates and releases including: Proton(DeFI) + Metal Pay(fiat on/off ramp) + FBBT (full regluatory compliance/securities expemption) = the crpyto bank for the 21st century. But then came some setbacks. At Money 20/20 October 2021, @MarshallHayner– the CEO of the Proton Blockchain and Metallicus announced that his team had applied then withdrawn their Federal banking charter application pending changes and guidance from Federal Banking Regulators. This plan for FBB&T (on Protonchain) to become a full service national charter bank was delayed due in part to a regluatory cloud that formed with the incoming Biden administration. During this interim period, few new banks were formed, with none at the national level. Instead the OCC (Office of the Comptroller of the Currency) acceptance has trended towards state licenced entities.
Since the Dodd-Frank Banking Regulations of 1997 were enacted, hundreds of national banks and federal savings banks across the United States have now converted to state charters. “These banks typically cite three reasons for converting: cost savings and increased earnings, [improved] regulatory access and relationships, and the dilution (or disuse) of [restrictive] national bank powers.” (https://www.bankdirector.com/issues/weighing-benefits-state-charter/ ) The enactment of the Dodd-Frank Banking Act resulted in significant cutbacks and a reduction in the availability of federal preemption or having to comply with differing state laws. With the majority of national banks being community banks that do not actually operate nationally, this and favorable state laws now make State chartered Banks the best choice for many financial institutions.
However, in the absence of any specific Federal regulations on cryprocurrencies, thirty-three states and Puerto Rico have taken the lead to enact pending legislation for reviewing crypto regulations with another seventeen states having already enacted legislation to regulate or license digital currency (token) transmissions. Such state regulations cover 1) the use of cryptocurrencies as legal tender in business transactions (including taxation), 2) and/or impose regulations for cryptocurrency exchanges as money transmitters, 3) and define the legal the status of smart contracts and crypto-tokens. Here is a list of current or pending crypto-legislation by state.
So far, only a few states (like California, Wyoming, Florida, Texas, and Colorado) are considered crypto-friendly states to have adapted none of the restrictive commercial laws against blockchain innovation or else passed friendly digital asset regulations and licensing requirements. For instance, Wyoming is considered to have the one of the most crypto-friendly regulations in the United States; including tax breaks for crypto transactions; approval of two new crypto-bank charters ( Kraken Financial and Avanti); and over 20 laws that make it easier for crypto businesses to operate. Note: Although Wyoming is not FDIC insured for state banks, their SPDI (special-purpose depository institution) license provides banking oversight. But Texas does have FDIC insurance for state banks. And as a hub for Bitcoin miners, Texas in 2021 recognizes the legal status and protection of cryptocurrencies to pave the way for state banks to provide custody services for cryptocurrency and transmitter services.
In California, the Office of Financial Technology and Innovation will reportedly help create new crypto-specific rules to attract and encourage crypto-businesses and increase its 2,473 crypto ATMs. Colorado also passed great crypto-friendly laws and wants to allow for crypto tax payments. Florida is another crypto-friendly state that is about to accept crypto payments toward certain state taxes and Miami City is trying to become a crypto-hub. As an honorable mention, Montana has no sales and use taxes and they passed a law (30-10-105 MCA) to recognize crypto tokens (called utility tokens) and exempted them from state securities since 2019.
Amoung all these crypto-friendly states, the clear winner for Marshall (Protonchain) to host his First Blockchain Bank is either Texas or Wyoming. Both states already have laws on the books for the legal status and protection of cryptocurrencies. Both states also have crypto-friendly governors and legislators, and both states offer tax breaks or incentives for crypto-services. Wyoming incentives include a cryptocurrency staking program and advisory council; matching funds related to carbon capture, utilization and storage projects; and the formation and management of DAOs (decentralized autonomous organizations). Texas offers even better incentives; such as "10-year tax abatement, sales tax credits and workforce training from the state” and crypto-friendly laws (like Business and Commerce Codes-Chapter 12) to legally allow state-chartered banks to provide clients with Virtual crypto-currencies custodial services simply by “filing a financing [ID] statement” and showing “exclusive transfer control” or “shared” possession with private wallet keys held in escrow. (source:)
But Wyoming can not compete with the Texas State Constitution (Article XVI, Section 16(c)) that insures Texas state-chartered banks are at least equal in powers, rights and privileges to their federal counterparts, which may be better than federal banks in some cases. "Of particular interest is a "super parity" provision which provides a framework for a state bank chartered in Texas, upon application, to conduct any of the activities allowed by any other insured state or federal financial institution in the nation...[so this] dramatically increases Texas’ appeal as a central location from which to conduct nationwide banking activities…[because] there is no "super parity" provision available to national banks. (Section 32.010 of the Texas Finance Code)." https://www.dob.texas.gov/sites/default/files/files/Bank-Trust-Companies/charterbnk.pdf Thus, Texas generously giving state banks these expanded powers, higher legal lending limits, and parity with national banks may be the best reasons of all for Protonchain to charter their first Bank in Texas.
Perhaps these banking benefits help explain why, last December (2021), we saw part of the Metallicus team join Marshall for a visit to the Texas capital. This visit for no apparent reason was made public a few days later by this photograph shared here in this tweet:
What is certain is that sooner or later, Marshall will receive his first State Bank charter likely no later than 2023. But one has to wonder if Marshall and his Proton Blockchain were signaling in this tweet above that they have already been laying the groundwork to open their First Blockchain Bank in Texas! Our bet is that Marshall has already chosen his Bank location for the reasons above and added bonus of Texas being the 9th or 10th largest economy in the world!
The Protonchain team has recognized by future-proofing their blockchain with a Blockchain Bank they can merge traditional and decentralized finance unlocking banking access 24/7 for everyone, so that no one gets left behind!