Banking veteran on changing the global financial system
- John Vasquez uses his banking knowledge to decide which cryptos to invest in.
- He thinks a global shift in the banking system will make some cryptos more valuable.
- Specifically, it is considering five that are compliant with the new ISO 20022 standard.
As the crypto market continues to trend sideways, John Vasquez does not have his eye on the charts.
Vasquez, known publicly as Coach JV, examines the big moves happening on the political and banking front.
Vasquez spent 12 years at Wells Fargo, most recently as vice president and district manager. But in 2017, he decided to leave the banking world. Today, he’s busy building his financial freedom and educating others on how to do it, too.
His company, 3T Warrior Academy, offers a fee-based program focused on financial, mental and physical well-being. He also posts free crypto content on social media, including TikTok, where he has almost a million followers.
His biggest goal now is to teach people how to take advantage of a changing world – specifically, the shift from what he sees as an outdated banking system to a new financial system powered by blockchain technology.
And while there is a lot of fear in the market and uncertainty around regulation, the long-term developments ahead are good signs for crypto, he said.
States like Texas, Arizona, Wyoming, Florida, and New York are striving to become crypto hubs. At the federal level, the Biden administration is reportedly preparing an executive order to direct federal agencies to regulate cryptocurrencies.
“When I hear stuff like that as an investor, it’s positive for me,” Vasquez said. “If it’s a systemic threat to the economy, they know they can’t stop it. So first they’re going to resist it, they’re going to prosecute it and regulate it, then they’re going to stop it. will join him.”
On the banking front, Vasquez said growing interest in crypto will mean banks will have no choice but to adapt.
Traditionally, banks earn money in three main ways: income from capital markets, interest income and fee income. And all three could soon be challenged, Vasquez said.
Certainly, JPMorgan, the largest American bank, posted a record profit of $48.3 billion in 2021. Citi and Wells Fargo also had a solid year, thanks in part to lucrative commissions from investment banks. But Vasquez said their performance was likely due to the
generated by loose monetary policy and low interest rates, which he says are not sustainable.
He cited three other factors that could turn the tide for banks. The stock market is in a slump, which could slow sales, trading and underwriting services. Cryptos also fell broadly alongside stocks in the latest risky environment, and
could increase trading volumes.
Second, customers don’t visit banks as much as they used to. The last five years have seen a 35% reduction in pedestrian trafficNPR reported in 2021. This limits tellers’ ability to promote credit cards, loans and various other types of services, Vasquez said.
And third, customers are increasingly turning to decentralized finance. The amount of crypto held in DeFi globally has increased by around 8,558% since January 2020, according to Statista.
Meanwhile, exchanges like Crypto.com and Coinbase have announced that customers can deposit government and employer paychecks into their exchanges.
“What this tells me is that the banks are feverishly rushing, in my opinion, to get up to speed with the blockchain, to work with the OCC, that they have already been approved to hold the cryptocurrency “, Vasquez said, referring to the US office. of the controller of the currency.
He continued, “They just have to get their stuff together, submit it to the OCC. So what I see overall is that cryptocurrency, blockchain, stablecoins are going become part of our ecosystem.”
No matter how far DeFi evolves, most customers will still want a trusted party to have custody of their finances, he noted. This is why it focuses on the opportunities that will arise from the integration of the banking system into the crypto sector.
Blockchain technology also creates a great opportunity for banks to move money faster, while its low costs will allow them to build better fee structures that benefit customers and their profit margins, Vasquez said.
According to Frank SorrentinoCEO of ConnectOne Bank, government guidelines and regulations will evolve in 2022. This will lead to more banks migrating their processes and payments to blockchain, he added in a statement. Forbes article in December.
“My view is that by 2025, maybe 2030, you’re going to be able to access your Wells Fargo and you’re going to have a cryptocurrency wallet, a central bank digital currency Fed wallet, and then you’re going to be able to get DeFi loans,” Vasquez said.
Potential crypto for the future of banking
First, Vasquez believes the rails being built for the banking system are deeply tied to the Ethereum blockchain.
Traditional companies like JPMorgan, UBS and Mastercard have invested in ConsenSys, a protocol that supports blockchain-based financial infrastructure primarily on Ethereum.
Vasquez is focused on continuously improving his position in ether. He says he forges his way into crypto every month and has an ether miner.
It then focuses on ISO 20022 compliant cryptos. It is an international messaging system for global financial institutions that was first introduced in 2004. It aims to standardize messaging between institutions and to replace the SWIFT system, with full integration in effect by 2025.
Of the cryptocurrencies conforming to this upcoming system, Vasquez says he has invested heavily in ripple (XRP), star lights (XLM), and Algorand (ALGO).
Each platform potentially offers utility to the global financial system. XRP is an institutional money transfer system, currency exchange and remittance network. Although he faces an ongoing battle with the Securities and Exchange Commission over whether it is a security, Vasquez says it is already in use around the world.
Stellar Lumens is an open-source, decentralized protocol for digital currency to fiat transfers. Algorand aims to accelerate the convergence between decentralized and traditional finance.
Finally, Vasquez recommends checking quantity (QNT), a payment validation token. Although he is not invested in it, it is research his team is working on. This crypto is also ISO 20022 compliant.
While that doesn’t necessarily mean institutions will use these platforms, Vasquez said ISO 20022-compliant cryptos are likely to do better than other altcoins when regulations come to town.