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Ryan Bozarth, the former CEO of Coinbase Custody, has launched his new startup, Dakota. This platform aims to tackle the banking challenges that many in the crypto world face.
When clients open accounts with Dakota, their funds automatically convert into an “on-platform” stablecoin backed by U.S. Treasurys. Plus, they can avoid fees when making transfers through ACH, Fedwire, SWIFT, or SEPA.
Bozarth’s goal is clear: provide a reliable banking solution for crypto startups and foundations. Many of these organizations have struggled to access traditional banking services, especially after the collapse of Silvergate Bank.
According to Bozarth, international crypto foundations often find it tough to secure banking partners. “Because they are international and affiliated with crypto, they have a hard time getting a bank account,” he explains. He estimates that thousands of these foundations, holding billions in capital, are facing significant hurdles.
“What we saw over the last few years is a banking system that made it hard for crypto organizations to get accounts,” Bozarth adds. “Dakota solves this by working with various bank partners to streamline the banking process.”
As a “crypto-native” internet banking platform, Dakota allows clients to make U.S. dollar transfers without incurring common fees. Customers can also earn rewards on their Treasury holdings since their deposits are fully backed by these bonds.
When clients deposit money into Dakota, it automatically converts to a Treasury-backed stablecoin. “You send in a dollar, and it gets converted to a Treasury held on-chain,” Bozarth says. These stablecoins work only within Dakota’s ecosystem, which helps avoid risks associated with depegging.
Customers can earn rewards on their U.S. Treasury holdings, adding even more value to their deposits. Although Dakota is newly available, it has already attracted over 200 customers.
Tyler Butts, a partner at Webslinger Advisors and a Dakota customer, shares his thoughts: “It’s a night-and-day difference from what we’ve experienced with other bank accounts.”