SAN ANTONIO — As cryptocurrencies gain popularity, users predict it will transform the future of money and the traditional banking system. Rather than view the digital asset as a threat, Jefferson Bank sees it as an opportunity to expand its services.
Erik Ahlenius, Executive Vice President of Jefferson Bank, says he was first introduced to bitcoin in 2017 when he was approached by a client. She asked the bank if it was possible to hold the digital asset in her trust. Ahlenius says he wanted to figure out what was driving the adoption of bitcoin, as he watched the cryptocurrency rise in value. Ahlenius says since last year, Jefferson Bank has been exploring banking options, from transfers to custody services for customers. The bank is looking to possibly work with Coinbase Custody to provide storage.
“With the idea being that a client of Jefferson Bank may pass away holding cryptocurrency and Jefferson Bank would be named the executor of their will. We would have to at that point, step in as the fiduciary and transfer the cryptocurrency from their private wallet,” he said. “I can see why other community banks would not want to touch this. This is so unique and so new. Cryptocurrency is built to operate outside of the banking industry. So the irreversibility of the transactions creates a whole different level of issues, potential issues.”
Early June, the Texas Department of Banking issued a note to confirm that state-chartered banks can offer cryptocurrency custody services. The department says banks can choose to offer services based on their expertise, risk appetite and business model. Ahlenius says Jefferson Bank is willing to take on the risks.
"Right now, we’re limited to bonds, and going out further on the risk curve, buying stocks and things like that in the equity market. I would love to years from now, be able to offer our clients decentralized financial products,” he said. “We can be innovative and forward thinking and that’s something that we’re excited about. We can wrap our arms around this.”