A bank based in Wyoming is on the brink of making history for a couple of reasons. The first, it deals in crypto currency and second, the Federal Reserve could give it a master account. Called Avanti Bank, it has a routing number given to it by the ABA, the American Bankers Association. This is a necessary step to getting an account with the Federal Reserve.
Why is an account number so important? Routing numbers identify banks which issue checks and needed for various transactions. It is issued to federally recognized institutions of those chartered by a state and eligible for a federal account. This information is available on the website of the American Bankers Association.
Quite a few depository institutions in Wyoming like Kraken and Avanti have been wanting federal master accounts. A bank with this type of account becomes eligible for activities such as depositing funds with the Federal bank. It can also access the worldwide payments system.
Julie Hill, Law Professor at an Alabama University said that Avanti did get its own routing number, in a Tweet. But this in itself cannot be considered confirmation of a master account for the bank. Any bank that is attempting to get its very own master account should possess the requisite routing number. The next step is the receipt of opinion letters to the ABA from the feds to clarify entity eligibility. Applications are processed after the Fed issues the number.
In November 2021, several members of an advisory council from credit unions and other banks expressed their concern. They were not sure that any institution having novel charters should have access to the same payments system. According to them, the risk to the entire financial system becomes higher. But Avanti’s founder, Caitlin Long is optimistic that the bank’s application will be approved.