In a rare link-up of traditional banking and tokenized cartoon characters, Anchorage Digital Bank, the storage tech startup that became a national trust bank last year, is now the custodian of a set of nonfungible tokens owned by iHeartMedia that include a CryptoPunk and a Mutant Ape.
A New York-based broadcast and podcast company, iHeartMedia, has been buying NFTs — tokens representing digital artwork — and creating podcasts that feature characters based on these tokens. The first, "Prop Culture," kicked off in June. It’s hosted by the TV writer, producer and voice actor Matt Harrigan (who voices Loot Bag #2020), the movie director and writer Jiyoung Lee (the voice of Quirkies #1988) and the TV producer and musician Dave Bonawits (Quirkies #307).
“Not only has this allowed us to experiment in web 3.0 through building these new experiences to entertain audiences, but this has also allowed us to explore how NFTs, art, content and communities of fans interact together,” said Conal Byrne, CEO of the iHeartMedia Digital Audio Group.
Byrne also sees NFTs as a way of protecting digital rights.
“I think that is what makes NFTs so interesting and powerful,” he said. “As we think about content, IP, art, ownership, it’s that you have a digital asset tied to a piece of art or content that is provably unique, rare and owned on a decentralized, public ledger and on a chain of your choosing. All of that is managed to an extent in a trustless and permissionless framework. How that plays out will be interesting, but ultimately it provides an interesting lens for us as content creators to experiment with.”
He’s not sure whether iHeartMedia will sell its NFTs in the future. For the Non-Fun Squad NFTs, “the main goal was to just focus on building great IP and content for our audiences to enjoy.”
San Francisco-based Anchorage Digital Bank started out as a
Anchorage already holds NFTs in custody. For instance, it’s the safekeeper of the CryptoPunk Visa bought in August for $150,000.
“In a way, Visa forced our hand. They jokingly came to us and said, wouldn't it be awesome if we did this?” said Diogo Monica, co-founder and president of Anchorage Digital. “And we were like, OK, we'll support you. And so they were the first ones that actually came and made us go through this.”
Once the Visa announcement came out, other clients and companies asked Anchorage to custody their NFTs, too, Monica said.
“Think about the same way that you wouldn't really leave a Picasso in your garage,” Monica said. “If an NFT gets to be valued at a certain number, you now need an institutional way of storing it. The same way that you would store your Picasso in a temperature-controlled, humidity-controlled, safe vault, you would also store an NFT in an institutional bank.”
NFT art does seem to have remained popular even through this summer’s crypto winter.
According to
The news site’s analysis of CoinMarketCap data on NFT collections found that the top 20% of NFT artists earn more than $96,000 a year.
The most expensive NFT collection is Bored Ape Yacht Club, which has had an average price per NFT of 101.96 Ether, or $108,948, over the last 30 days. More than half of all NFT purchases are made with Ether, the site found.
“Much like traditional art, the value of NFTs can be highly subjective,” a crypto.news spokesperson said. “However, NFTs can offer owners something extra, such as in the case of Bored Ape Yacht Club where owners are granted access to an exclusive community. This exclusivity can drive the values even higher.”
Valuable NFTs are a strong use case for Anchorage’s technology, alongside other digital assets including bitcoin and Ether, Monica said.
“Imagine having an NFT on your computer that's worth a million dollars,” he said. “It's a password that you have that’s worth a million dollars. That’s not something that anybody wants to do on their own. There’s a big cybertheft risk.”
Observers see promise in the concept of banks like Anchorage custodying NFTs.
"This is not a one-off situation," said Greg Schoenberg, advisor at Weiss Multi-Strategy. "Sure, in the short term, it can be scoffed at. But in the longer term, regulated financial institutions that offer services to holders of digital assets such as NFTs will be far better off than the ones who are stuck in the analog world."
There's a wide range of uses for decentralized finance and related blockchain tech, says Wirex's Yves Renno.
Anchorage provides multi-person integrity, which means no single individual at Anchorage or working for Anchorage’s clients can move any of the NFTs.
“That means that they're protected from theft,” Monica said. Clients decide how many and which people get permission to do anything with the NFTs.
Anchorage stores the assets in hardware security modules that are offline; they’re not directly connected to the internet at any point.
In April, Anchorage
“We love the fact that we're a regulated bank,” Monica said. “We love the fact that there's heightened scrutiny. We love the fact that we're actually being audited by the oldest banking regulator in the United States. The past six months have shown a massive flight to safety during the bull market. People are flying to safety and flying to safety means flying to Anchorage to a clear regulatory charter.”
