Building A Bitcoin Bank w/ Alexander Leishman

River was founded in 2019 by Alexander Leishman with the explicit goal of building a Bitcoin bank. River is not a federally chartered bank but partners with banks to handle the fiat side of its operations, with a federal charter described as a possibility someday. The core business is making it easy to buy Bitcoin and keep it safe, with a longer-term trajectory toward becoming a customer's primary bank account integrating Bitcoin and dollars seamlessly in one app. Leishman's background includes working in Bitcoin since 2014, teaching assistant work on the first Bitcoin class at Stanford, and early custody work at Polychain Capital, which later led River's seed round. He concluded early that most blockchain use cases beyond Bitcoin were nonsense and said the market took roughly ten years to reach the same conclusion.

River supports only Bitcoin as a non-fiat asset. Leishman argued that being Bitcoin-only allows River to build specialized products that multi-asset platforms cannot easily replicate, and characterized Coinbase's decision to focus on multi-asset exchange trading as pursuing a local maximum rather than the global maximum opportunity. He said altcoin trading revenue from retail at around two percent per trade was always going to be a flash in the pan and that exchanges are not where the real money is made in financial services broadly. River pays a high yield on dollars and distributes that yield in Bitcoin.

Leishman said River does not currently support stablecoins because there is little demand from its US-based client base. He argued that stablecoins have strong product-market fit in countries with weak currencies but not inside the US, noting that stablecoin yields are generally lower than Treasury bill yields and that Americans already have access to high-yield savings accounts but do not use them because banking is extremely sticky. He said the push for Americans to care about stablecoins is driven by capital that flowed into blockchains needing somewhere to go after altcoins and ICOs failed. He added that if US clients want to send and receive dollars via stablecoin rails, River would integrate it as a dollar rail rather than as a new asset balance.

Leishman argued that Bitcoin's limited use as a medium of exchange is not a technological problem but an economic friction problem rooted in sticky payment network effects, pointing to Argentina as an example where people still transact in pesos despite high inflation. He said stablecoins are better than Bitcoin for medium of exchange use cases, and that the primary reason Lightning has not gained traction is insufficient demand for a high-velocity Bitcoin payment network rather than technical issues. River has supported Lightning deposits and withdrawals since 2019 but sunset its external enterprise Lightning API because there were not enough potential clients. River served as the Lightning backend for the Chivo wallet in El Salvador for approximately one year and is now focused solely on relationships with end clients holding deposit accounts.

After FTX collapsed, Leishman moved from being on the fence about proof of reserves to actively supporting it. He argued that proof of reserves would have flagged issues at Prime Trust and FTX sooner and might have prevented them through forced transparency. He said paper Bitcoin risk may exist not at the custody layer but through leveraged or derivative financial structures, and that Chinese exchanges have historically been the most opaque and are more likely candidates if paper Bitcoin exists anywhere. He said Coinbase and public companies creating paper Bitcoin is very unlikely given segregated custody and on-chain address visibility.

Leishman said the stock-to-flow model is for the first time not following its predicted path and that Bitcoin price action over the last year and a half has been disappointing, though he said first principles remain unchanged. He argued that AI represents a massive technological revolution potentially as large as the internet and is drawing attention away from Bitcoin, and that Bitcoin benefited for ten years from being the novel technology in the room and that advantage is now gone. He believes Bitcoin has not reached full price discovery as a store of value and should at minimum flip gold in market cap, and notes that gold failed as a reserve asset primarily due to poor transmissibility in a global economy rather than any self-custody problem.

Leishman contends that blockchains are primarily useful for two things: serving as base money and enabling regulatory arbitrage around existing financial activities. He argues that anything useful on-chain must be pegged to the real world, which reintroduces trust and undermines the trustless premise, and that the oracle problem was a known issue since around 2012 before most smart contract projects launched. He is sharply critical of the broader crypto industry, saying people were lying to themselves for ten years trying to find problems for their blockchain solutions, and that there has been very little humility or contrition from crypto thought leaders despite billions lost on projects that failed for reasons discussed in advance. On quantum computing, he predicts it will likely be many years before a viable quantum computer cracks ECDSA, says the market will converge on a new quantum secure algorithm, and warns that rushing a quantum resistant solution is far riskier than taking the time to get it right.