by Doug Hardy
The state’s financial technology hub appears to be growing fast in Fairfield County following the passage of the Innovation Banking Charter law as part of an omnibus legislation package during two days of special sessions in late June.
Numisma Bank, which officially moved its headquarters to Greenwich this week, recently became the first uninsured banking entity to be granted a master account with the Fed, thus gaining equal access to the Federal Reserve’s financial services network with companies like Visa or Mastercard.
Numisma is a “currency reserve bank,” which means it specializes in moving large amounts of cash for big entities, both private and public, domestically and internationally. It is the second “innovation” bank to move into Connecticut over the past year and its arrival was announced Tuesday during a news conference at its headquarters in Greenwich.
The first innovation bank to come to Connecticut in anticipation of the new law was Banking Circle US, which was chartered in July 2023 and is based in Stamford. Gov. Ned Lamont announced its arrival in January.
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The legislation was designed to spur growth in the FinTech sector of Connecticut’s banking industry, and it appears to be working. Banking Circle US was the first new bank chartered in Connecticut in nearly nine years.
The last bank to receive a charter in the state before Banking Circle US was the Voya Institutional Trust Company, which launched in Windsor in September 2014.
Banking Circle US is focused on the transaction sector. According to its website, Banking Circle’s goal is to “establish proprietary access to all of the world’s major currencies on one platform and create a financial ecosystem that cuts out the time and cost of cross-border payments, enabling a new way for banks, financial institutions, payment service providers (“PSPs”), marketplaces, and corporates to manage their financial needs.”
Under the new law, innovation banks are eligible to gain licensure in Connecticut and engage in banking practices despite not being insured by the FDIC. The companies addressed by the legislation don’t need FDIC insurance, because they aren’t offering retail banking services, such as checking and savings accounts, and holding onto people’s money.
The Banking Department’s website says “an uninsured bank has all of the powers of and is subject to the requirements and limitations applicable to an FDIC insured bank, except an uninsured bank cannot accept retail deposits and does not need to comply with community reinvestment laws.”
Lamont celebrated the company’s arrival during Tuesday’s news conference along with other state officials including commissioners Daniel O’Keefe of the Department of Economic and Community Development, and Jorge Perez of the Banking Department.
“Fintech innovators realize that Connecticut offers a competitive landscape for their companies to grow and thrive in our state,” Lamont said in a release following the news conference. “I am excited to welcome Numisma Bank to Connecticut’s business community. This launch represents another step forward for Connecticut as a leader in financial services, showcasing the state’s ability to foster a supportive business environment that attracts cutting-edge companies like Numisma Bank.”
Perez welcomed the Numisma as the newest Connecticut-chartered bank.
“Connecticut’s innovations bank charter provides the necessary regulatory framework and guardrails while allowing the flexibility for companies to innovate in the FinTech space. We wish Numisma success in its new home,” Perez said.
O’Keefe said Numisma’s choice to establish its global operations in Connecticut is proof that the state is offering an exceptional value proposition for FinTech innovators.
“We possess a winning combination of skilled workforce, a supportive business environment, and an innovative culture that attracts market disruptors, leading to new job opportunities and economic growth,” O’Keefe said.
Vivek Tyagi, CEO and co-founder of Numisma Bank, chose Connecticut over nearby New York, which has a similar law in its statutes.
“I’d like to thank Governor Lamont and Banking Commissioner Jorge Perez for their support,” Tyagi said. “The decision to charter the bank in Connecticut was influenced by the state’s business-friendly climate and access to a deep talent pool. The Connecticut Department of Banking has been a key partner in supporting Numisma Bank’s vision. We share its commitment to providing essential services in the global banking industry and are happy the department remains dedicated to offering comprehensive regulatory oversight while fostering an environment where innovative financial services can thrive.”
According to the release from the governor’s office, Numisma Bank focuses exclusively on, is the only U.S. bank dedicated exclusively to, the distribution of U.S. dollar and foreign currency banknotes, a critical service that ensures the flow of physical currency for central banks and international financial institutions.
“In recent years, many traditional U.S. banks have exited this complex, low-margin business due to increased regulatory demands as well as an overall decline in cash usage,” the release said.
“Numisma is described as being positioned to fill that gap by providing essential services to both the Federal Reserve and global monetary systems to ensure resilience in key markets. The company’s cutting-edge, fully cloud-based financial infrastructure is designed to support the purchase and sale of physical banknotes on an international scale. With no retail customers or involvement in loans or investments, Numisma Bank focuses solely on delivering efficient and secure transactions for central banks and financial institutions globally.”
Numisma Bank’s leadership team includes former senior executives from top global financial institutions such as Goldman Sachs, Morgan Stanley, and White & Case.
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