GREEN BAY – A Green Bay-based company is giving new hope to community banks looking to defend themselves in a growing competitive world of cryptocurrency and secure blockchain transactions.
The offer is software that integrates this new technology into the already available framework of online banks.
The language is still difficult for many to understand, as is the functionality. Additionally, there are restrictions for US banks that engage in certain activities involving cryptocurrency.
Yet people keep talking about it and the total value of cryptocurrencies exceeded $2 trillion in the first months of 2022.
In the middle of it all, Sequoiaa Green Bay-based fintech, envisions the future of banking with digital assets — like your birth certificate or land title — accessible anytime, and with the ability to use cryptocurrencies to trade or make transactions. payments.
This company believes in a future with embedded blockchain technology: a distributed digital ledger of encrypted transactions maintained on a global public network.
“It’s just a matter of how it will be used,” said Justin Seidl, Founder and CEO of Sequoir.
The Crypto Revolution Creates Business Opportunities
Seidl, software developer, was born and raised in Luxembourg, 20 minutes from Green Bay. He graduated from the University of Wisconsin-Green Bay, lived in Chicago for five years, and worked as a product manager for recruiting firm Hunt Club.
In 2018, he moved to Green Bay with his wife and around the same time launched Sequoir. Seidl said the name comes from a mix of “Sequoia” and “acquire,” and the offices are located in the historic Bellin Building in downtown Green Bay.
He foresaw the crypto revolution and believed that banks and credit unions would eventually step in, expand their product base and integrate the technology.
Recently, his company received $1.7 million from investors through Tundra Angels, an offer from the Greater Green Bay Chamber. Investors include two local community banks, Bank of Kaukauna and Bristol Morgan Bank, which serve Dodge, Fond du Lac and Winnebago counties.
Mathieu Keedirector of Tundra Angels, said it was the group’s first investment in Green Bay and the first crypto-related.
Save on third-party trading app fees
Among the things that attracted investors was this integration provided by Sequoir, which will help banks pull many assets from third-party trading apps like Coinbase, by “allowing customers to access crypto markets via the bank itself.
The company has also entered into a program with Jack Henry, a technology company headquartered in Monett, Missouri, which offers payment processing services for the financial industry. They serve more than 8,500 customers nationwide, including more than 1,500 banks and credit unions.
“That means we’ll have the ability to integrate directly into these online platforms that they provide to banks,” Seidl said.
But at first it was not his idea.
He focused on building software that allowed US residents to buy and sell digital assets, such as cryptocurrencies or NFTs (non-fungible tokens) and did compliance and regulation a priority.
Sequoir has a regulatory base and is part of the Financial Crimes Enforcement Network, a US Treasury Department that collects and analyzes information on financial transactions to combat domestic and international money laundering, terrorist financing, and crime. other financial crimes.
Seidl says this strategy turned out to be a conservative approach and brought very little growth to the company.
In 2021, it decided to move to a service model, using Sequoior’s built-in software to instead offer blockchain technology to financial institutions.
The big advantage for customers, if they decide to enter these markets through their personal bank, is that they will not have to pay the transfer fees that they pay on third-party crypto trading companies.
Seidl explained that customers who use these companies pay a 1.5% fee for using the Automated Clearinghouse Network, a funds transfer system used by organizations for payroll, direct deposit, payments and refunds of taxes and other services; as well as a 3.5% charge for the use of credit cards.
Clients would only have to pay the difference between the buy and sell price of a cryptocurrency, or what is called the “spread” in trading.
John Brogan, President of the Bank of Kaukauna, considers cryptocurrencies as assets, as another product that banks can offer. But he also understands that this technology will add more benefits to community banks and their customers.
Regulations fall into place
Financial institutions offer protection for important documents such as birth certificates, wills or land titles. Brogan believes that one day these documents will be digital assets that can be accessed at any time, and it makes sense that people would use banks to store them. It is also considering crypto transactions and payments made using the bank’s apps.
He believes banks will become the economic validators of “who is actually doing the transaction”, as these institutions are often in one of the most trusted positions.
However, the Office of the Comptroller of the Currency, the administrator of the US banking system, said in November that all banks must notify their regulators if they intend to provide transactions with Bitcoin or other coins. They must also demonstrate that they have appropriate risk management tools in place before undertaking these and other activities, such as providing custodial services for clients’ crypto holdings.
The regulations aren’t there yet, Brogan said, but it will come at some point.
In the meantime, he thinks Sequoir can provide the infrastructure and “is a great solution for smaller community banks.” It’s because they don’t have the same resources as big companies to invest in software developers and develop this kind of technology.
“What we need to do is look at smart vendors and vendors like Sequoir, who provide the technology solution that would bridge the gap,” Brogan said.
Still, Seidl explained that this technology doesn’t need to be specifically used for payments or to store value or replace conventional forms of payment.
It’s as if debit and credit cards were once viewed with suspicion, but are now extremely common.
He simplifies it: “It’s just a whole new vehicle in today’s digital age for transacting value.”
Ariel Perez is a business reporter for the Green Bay Press-Gazette. You can reach him at [email protected] or check out his Twitter profile at @Ariel_Perez85