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Cogent Bank partners with TassatPay blockchain platform – Tampa Bay Business Journal – Tampa Bay Business Journal

The blockchain takeover of traditional banking is at Tampa Bay’s doorstep.
Orlando-based Cogent Bank, which has two retail locations in Tampa Bay, is among the first in the nation to leverage a blockchain-based platform as a payment solution for its customers.
The bank announced an agreement to provide its business-to-business clients with access to TassatPay, the first blockchain-powered B2B payment platform with regulatory approval deployed within the U.S. banking system.
“Blockchain is the future,” Cogent Bank President Chirag Bhavsar told the Tampa Bay Business Journal. “In the next five or 10 years, this is how money is going to move.”
TassatPay enables the instantaneous transfer of funds between network participants and removes processing and settlement costs associated with traditional wire transfers and the Automated Clearing House network — the electronic funds transfer system used by over 25,000 depository institutions within the FDIC network.
“Our B2B clients recognize that blockchain-enabled payments offer better fraud protection, faster settlement, reduced inefficiencies and lower costs that benefit their clients,” Bhavsar said. “Most importantly, TassatPay can be adopted without disruption to our operations and the services we provide.”
2021 was a breakout year for cryptocurrency and saw increasing demand for blockchain among bank customers who want to buy and sell digital assets. Bhavsar says what TassatPay offers, however, shouldn’t be linked with cryptocurrency. Instead, the platform should be thought of as a new vehicle for transferring and settling funds.
Blockchain technology is more than 10 years old and has numerous applications, but banks are just starting to take it seriously, according to Ron Totaro, the CEO of the platform’s parent company, Tassat Group LLC, a global fintech provider that specializes in digital payment solutions.
“We’re the leader in this space, and it’s just in the last year I’ve had the chance to speak to 100 banks if not more and their leadership teams about how to upgrade their technology capabilities specifically using blockchain,” Totaro told the Business Journal.
“It’s not about upgrading technology for technology’s sake,” he added. “It’s about creating new capabilities that will attract and retain customers and grow their deposit base.”
Bhavsar and Totaro attribute the sluggish rate of adoption to the challenge of applying an outdated regulatory framework to the novel technology.
While several large banks have blockchain projects underway, TassatPay is the first blockchain-based B2B payment platform of its kind to receive regulatory approval. Bhavsar says the FDIC, OCC and Federal Reserve want to make sure banks integrating the tech are doing their due diligence to ensure they have the appropriate resources, and that partners are vetted and reputable.
“Is it taking longer than I’d like? Yes,” Bhavsar said. “But I give [regulators] a lot of credit for allowing us to move forward [with this deal].”
TassatPay enables bank-issued stablecoins, or digital currency whose value is tied to real-world assets like the U.S. dollar — a key feature that Bhavsar says has satisfied regulators and differentiates the platform from competitors.
Regulatory barriers aside, the slow rate of adoption and integration of blockchain is also due to a lack of awareness and understanding, according to Bhavsar.
“People think we’re crazy,” he said. “They say we have a product that frankly nobody is even asking for. And I say, they’re not asking for it because they don’t understand it. But when [clients] do understand it, over time, they won’t be able to live without it.”
Banks’ customers that currently use TassatPay are limited to fund transfers with participants who also use the platform, but interoperability is coming, according to Totaro and Bhavsar.
Since starting in 2019, TassatPay has processed over $300 billion in transactions for its banking partners, which include Western Alliance Bank, Signature Bank, Customers Bank, and now Cogent Bank.
Cogent Bank’s two Tampa Bay branches — both established in 2020 — reported approximately $145 million in local deposits in 2021, an increase from $77 million the year prior, according to Tampa Bay Business Journal research. The state-chartered community bank operates six additional branches throughout the state.
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