Anchorage Digital: regulatory momentum driving stablecoin adoption

After the GENIUS Act passed this summer, Anchorage Digital's Boaz Avital discusses why institutional demand for stablecoin and crypto infrastructure has reached new levels. 

Can you introduce Anchorage Digital Bank and the mission that drives it? 

Anchorage Digital is a global crypto platform for institutions. We believed early on that institutions would drive digital asset adoption. But in 2017, we saw that there was no solution for institutions—banks, hedge funds, ETF issuers, asset and wealth managers—to participate in crypto with the safety, security, and regulatory certainty they demand. Our mission from the start has been to provide the infrastructure institutions need to participate in the digital asset economy. 

Institutions demand optimisation in security and regulatory compliance. That is why we decided to pursue a federal bank charter from the Office of the Comptroller of the Currency (OCC), the oldest banking regulator in the US. In 2021, we became the first—and still only—US federally regulated digital asset bank. Our bank charter provides institutions with augmented regulatory certainty and has helped us scale significantly in the years since. 

Today, we provide security for tens of billions of dollars in crypto for the world’s biggest institutions. The Anchorage Digital platform offers institutions everything they need to participate in crypto, including custody, staking, settlement, trading, on-chain governance, and self-custody. 

How has the appetite for crypto and blockchain-based products among US institutions evolved in the last few years? What’s driving this shift?

In the early years, traditional institutions were wading into the waters, with many interested in only buying and holding Bitcoin. Deeper participation in the ecosystem, such as holding more assets, employing trading strategies, staking, or governance, was previously reserved for crypto-native players. 

Today, institutions are demanding full access to the digital asset ecosystem in response to shifts in the regulatory and market environment. From the spot crypto ETF approvals in early 2024 to recently passed stablecoin legislation, institutions finally have the regulatory certainty they need to come off the sidelines. 

At the same time, the market has become much more mature. After market instability in 2022, the industry has learned time-tested lessons from traditional market structures, such as segregating custody and exchange functions. The result is a more resilient ecosystem that provides the protections institutions expect.   

Now, we have a clear pathway for consumers to participate in crypto through their existing financial institutions, opening significant opportunities for various institutions. 

Anchorage Digital Bank is the first and only federally chartered crypto bank in the US. What does this charter allow you to do that others can’t? 

We like to think of ourselves as the bridge between the worlds of crypto and traditional finance. At Anchorage Digital Bank, we offer federally regulated custody, staking, settlement, and on-chain governance—core services for participation in the digital asset class.  

Our federal charter puts us on the same regulatory footing as many of our Wall Street clients. This means we are not only a clear-cut qualified custodian but also provide bankruptcy-remote custody with segregated accounts by default—those are critical protections for many of our institutional clients. 

Additionally, being regulated at the federal level means we do not have to navigate a patchwork of state-by-state laws. This helps to optimise operations and regulatory compliance, while giving our institutional clients confidence when working with us. 

You work with some of the most forward-thinking companies in the industry. Which crypto services and products are most in demand, and why?

We have helped institutions worldwide safely, securely, and efficiently participate in digital assets since our founding in 2017. Many people know us as a custodian, but custody was just the start of our journey. 

Since 2019, we have provided institutional trading at scale, and we recently launched Anchorage Digital Prime in response to the increasing demand for an optimal trading experience. The new offering provides institutions with access to deep liquidity, 24/7/365 support, and optimised trading tools in addition to the proven safety and security of our platform.

As institutions seek to engage more deeply across the ecosystem, we have also observed a considerable rise in staking activity on our platform over the past year. Anchorage Digital Bank is the only federally chartered bank permitted to offer staking, providing a significant unlock for our client base.      

Are stablecoins the most promising bridge between traditional finance and DeFi, or are other tools and structures needed to make that bridge stronger?

Stablecoins are one of the most promising bridges between traditional finance and DeFi - especially after GENIUS passed - by bringing the dollar into the twenty-first century. Stablecoins offer 24/7 settlement and handle hundreds of millions of users at scale. They also serve as connective tissue between the US dollar and the crypto ecosystem, providing a critical on-ramp and off-ramp, as well as trading efficiency. 

While a foundational link between DeFi and traditional finance, stablecoins are just one tool. We are also seeing rising demand around the tokenization of real-world assets. Today, some of the largest institutions in the world are putting equities, bonds, and other assets on-chain, bridging digital asset innovation and real-world utility to drive optimal liquidity.  

At the end of the day, stablecoins and other tokenized products are complementary, although we have clearer rules of the road for stablecoins after the passage of GENIUS. 

There have been announcements from Circle, Stripe, and other players launching their own L1s. How will this impact crypto/digital asset interoperability? Could it become a blocker to adoption?

More chains are important for the ecosystem, which is why it is encouraging to see major names enter the arena. There always has been—and always will be—competition among L1s. This competition not only drives down costs for the end users but also fosters the innovation that pushes blockchain technology forward so quickly.

We live in a multichain world, and institutions will continue to pick the L1s and L2s that meet their various needs and particular use cases—from payments to AI to tokenized real-world assets. Looking ahead, the industry needs to prioritise security around cross-chain activity to drive interoperability in a safe and sound manner. 

Over the next 10 years, how do you see the role of traditional banks evolve in a world where blockchain and digital assets are mainstream?

As was the case with the internet, banks will have to move fast or risk being left behind. Banks already have the trust of their customers and regulators—now, they need to build up their infrastructure and expertise to participate in the digital asset ecosystem. 

Fifty-five million Americans are already holding digital assets, and rarely at a bank. That presents a serious challenge—and opportunity—for banks. 

One of the most promising areas for bank adoption is the use of stablecoins. GENIUS requires full backing by bank deposits and T-bills, which is essential for traditional banks. So, the question for banks is not about competing with stablecoins, but instead whether to issue them or watch others do so.

Anchorage Digital’s focus on institutions is one of our core strengths, helping banks accelerate their digital asset roadmap by leveraging our expertise.

 

About author

Boaz Avital is the head of product at Anchorage Digital and a founding engineer, leading the product development of the platform from inception. Before joining Anchorage Digital, Boaz led a large engineering team at Twitter, where he built mission-critical, high-scale infrastructure that served as the backbone for all of Twitter’s products and services. Follow Boaz on X and LinkedIn.

 

 

About Anchorage Digital

Anchorage Digital is a global crypto platform that enables institutions to participate in digital assets through trading, staking, custody, governance, settlement, stablecoin issuance, and the industry’s leading security infrastructure. Home to Anchorage Digital Bank N.A., the only federally chartered crypto bank in the US, Anchorage Digital also serves institutions through Anchorage Digital Singapore, Anchorage Digital NY, Anchorage Digital Prime, and self-custody wallet Porto by Anchorage Digital. Learn more on anchorage.com,  X, and LinkedIn.