Arrival may be moment CT ‘takes off’
STAMFORD — Five years ago, international banking giant UBS moved from its longtime downtown offices to smaller space across the street, while another banking multinational, Royal Bank of Scotland, was significantly reducing its own local contingent.
Today, the outlook looks much brighter for the state’s financial services industry.
This week, Digital Currency Group announced plans to create more than 300 jobs in the state in the next five years. After being rocked by UBS and RBS job cuts in recent years, officials say the arrival of DCG and other firms shows the state can attract a new generation of companies that are leading in financial technology and looking to hire in large numbers to support their growing operations.
“We’re excited about building something really special here in Stamford,” DCG founder and CEO Barry Silbert said at a press conference Monday at the company’s future headquarters at 290 Harbor Drive in Stamford. “We believe Stamford has the infrastructure, resources and talent to create a hub for the next generation of fintech and crypto companies.”
Aspirations of a ‘crypto capital’
The planned hiring surge at DCG, a formerly Manhattan-headquartered company that focuses on cryptocurrencies and blockchain technology, represents one of the most-significant corporate expansions in Connecticut. If DCG creates and retains more than 300 fulltime jobs, it could earn a state grant of up to approximately $5 million.
“We have the potential to really rival cities like New York City and Miami and make Stamford the crypto capital of the world,” Caroline Simmons, Stamford’s new mayor, said at the press conference.
Many business leaders also expect DCG’s move to encourage the migration to the state of other firms focused on cryptocurrencies and blockchain, the technology that plays a crucial role in supporting bitcoin and other digital currencies.
“This is like the moment when Connecticut takes off,” Matt McCooe, CEO of Connecticut Innovations, the state-chartered investment organization, said in an interview. “It’s unbelievable.”
Officials at the University of Connecticut are also bullish about DCG’s arrival. As a reference point for collaboration, the university already has a major partnership with Stamfordbased Synchrony, the largest financial-technology company headquartered in Connecticut.
“It creates a cornucopia of opportunities for partnerships,” David Noble, director of the Peter J. Werth Institute for Entrepreneurship & Innovation at UConn, said in an interview. “We hope that DCG evolves into a partner along the lines of Synchrony.”
DCG comprises one of several major fintech recruits to the state this year. iCapital Network, which opened offices in downtown Greenwich in September, can earn up to nearly $3 million in state grant funding if it creates 200 full-time jobs. In the South End of Stamford, the real estatefocused Tomo Networks is aiming to create up to 100 local positions by the end of this year. The amount of Tomo’s financial assistance from the state has not yet been disclosed.
Optimism about the likes of DCG, iCapital and Tomo contrasts with the disappointment over financial services’ stalled jobs growth in recent years in Connecticut.
In October, about 119,000 were working in financial activities in Connecticut. That total was down about 1 percent from the same point last year and down 17 percent from March 2008, when the state’s 2008-2010 recession started, according to state Department of Labor data.
During the past few years, the state has acutely felt the struggles of UBS and RBS. The UBS headcount in Connecticut has shrunk by more than 1,400 positions since 2012, while RBS laid off more than 700 Stamford-based employees between 2015 and 2018.
The downsizing of UBS contributed to its relocation in 2016 from 677 Washington Blvd., in downtown Stamford, into smaller offices at 600 Washington. The offices of RBS, which now operates in the state under the NatWest Markets name, are also based at 600 Washington.
In a sprawling pavilion at 677 Washington, UBS had once operated one of the world’s largest trading floors. After being vacant for years, the pavilion will become part of WWE’s future headquarters.
“It was just 15 years ago we were boasting about the largest trading floor in the world right there at UBS,” Gov. Ned Lamont said at the DCG press conference. “And then for years it was sitting empty as we were disrupted. So I’m tired of playing defense. “I like getting on the offense. Instead of being disrupted, I want to be disrupting. And that’s what DCG does.”
Confidence in financial technology
The enthusiasm about DCG’s arrival reflects a widespread belief that cryptocurrencies and blockchain technology can markedly improve financial services.
“Our industry’s vision is to create a more equitable system that eliminates the unnecessary costs and friction of moving money around the world,” Silbert said. “We want to remove any and all barriers for people looking for their big idea. We’re trying to create an even playing field for everybody, everywhere.”
Elected officials see DCG as a partner in effectively regulating cryptocurrencies.
“This brave new world of cryptocurrency is really going to need some good guys, some responsible people to provide direction and to give us guidance as to where we establish guardrails,” U.S. Sen. Richard Blumenthal, D-Conn., said at the press conference. “As with the internet, it can be a tremendous boon, but it also potentially raises issues and challenges in terms of stopping excesses and making sure the good guys prevail.”
U.S. Rep. Jim Himes took a similar position. He has been involved in financial services for many years — as an executive at Wall Street giant Goldman Sachs before he was first elected in 2008 to Congress, and now as a member of the House Committee on Financial Services.
“Blockchain and cryptocurrency — it’s an idea whose time has come,” Himes said at the press conference. “It feels a little bit the way the world did 25 years ago when the internet was emerging — meaning what amazing opportunities, what incredible value creation. Of course, there are going to be some stumbles along the way.”
Himes expects the financial services committee to focus more on cryptocurrencies and blockchain in the coming months.
“Like all other financial services, the beauty will be in creating a regulatory regime which keeps people safe and keeps out the bad actors, but doesn’t squelch the many innovative possibilities,” Himes, a Democrat whose district covers most of Fairfield County, said in an interview. “Inside the Financial Services Committee, we’re doing a lot of grinding away at understanding the concepts. I think in the next year you’ll see legislation emerge.”