Custody Bank CEO warns that traditional finance will face its first crypto winter

The CEO of Custodia Bank said the disconnect between the existing financial system and real-time settlement blockchain protocols is what is driving the disruption of traditional finance.
Caitlin Long, CEO of Custody Bank, an American bank specializing in crypto assets, warned that the move could pose a risk to adFi companies.
Long said in an interview with CNBC at the Wyoming Blockchain Symposium on the 22nd (local time) that "Big Finance
"The massive entry of cryptocurrency investors into the cryptocurrency market is driving this cycle, and this trend will continue."
"Traditional financial institutions could tolerate massive leverage thanks to discount windows and other safeguards," Long said.
However, in the cryptocurrency market, there is no such safety net, so the situation is completely different. In particular, cryptocurrency transactions are settled in real time, so there is a risk of a liquidity crisis.
He also warned that the risk is high. He added, "The traditional financial system is not updated in real time, so there are multiple safeguards built in. However, crypto assets are all processed in real time, so
It's a completely different system. The concern is how the big financial companies will respond when the inevitable bear market returns. Some are optimistic that there won't be a bear market this time, but I'm not.
"I've been watching the market since 2012, and I know it's coming again," he said. "One of the features of this market cycle is that institutional investors and corporate treasuries are really starting to participate in the market."
While some see this as a positive sign of increased adoption, excessive leverage and a lack of experience could lead to a massive sell-off when the next bear market hits, potentially damaging the entire financial system.
Some have warned that the crisis could spread to other cryptocurrencies.
Perkins echoed this concern, saying, "The biggest systemic risk is the lack of an ecosystem that manages and rebalances risk in real time.
"The problem is that there are ecosystems that shut down on weekends and holidays at the same time," he said. Perkins said this inconsistency in clearing methods could cause liquidity problems, which could affect all financial institutions.
He stressed that this was the root cause of the crisis.