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Crypto-Currency, The Solution to Banking

By: Christopher Nani

The cannabis legalization phenomenon has taken over the globe.  With over twenty-five countries (and counting) legalizing cannabis in some fashion and allowing exports, it is quickly becoming a global commodity. However, the largest consumer of legal cannabis in the world, the United States has kept cannabis illegal at the federal level.  While this has not hindered individual states from legalizing cannabis (thirty-one legal states and counting), it has dramatically affected access to banking services for cannabis companies.  While some banks are beginning to service the cannabis industry, handling billions of dollars in cash and the element of fraud are major challenges affecting U.S. cannabis businesses.

One potential fix that has been tried since the beginning of legalized cannabis in the United States for cannabis banking has been crypto-currency, the ability to process transactions through digital money. “The advantage of crypto-currency is that there is no need to use a bank for the transaction to purchase an item and there are no charge backs to the business because the transactions cannot be reversed,” says Francis Koenig with Blockhold Capital, a Beverley Hills firm and the first publicly-listed comprehensive blockchain advisory company. “However, the average person still does not understand how crypto-currency works and they think crypto-currency is only Bitcoin, and it costs thousands of dollars.”

There are crypto-currencies servicing the cannabis market in the U.S. such as PotCoin, Cannabis Coin, Dope Coin, Hemp Coin, and CannaCoin.  Investopedia is reporting that so far none of these coins have made a real impact in the U.S. Cannabis market as a dominant payment source.

But, as the cannabis industry grows, so does the knowledge and understanding of blockchain and crypto-currency technologies. In October 2018, eight out of ten executives polled by Pricewaterhouse Coopers said their companies are actively involved with blockchain.   “Blockchain has the ability to track everything that happens within a transaction”, says Koenig. “The use of blockchain and crypto-currency will dramatically increase over the next five to ten years because of the many benefits, such as better tracking of financial transactions, increased ability to detect fraud, increased ability for governments to accurately accept and track tax payments with less cost, and decreased merchant processing fees, just to name a few advantages.”

One new start-up’s bet is they can make S.E.C. compliant use-cases common in the cannabis industry and beyond.  Pay-Trak ( is a subsidiary of the Indigenous Nations Tribal Reserve, headed-up by CEO and attorney Rick Dane Moore. The venture joins payment and tracking software with a sovereign tribal token, White Buffalo Coin ( They aim to set crypto-currency payment standards to bolster acceptance by integrating logistical tracking across the cannabis industry, and eventually across all industries.

“The challenges facing crypto-adoption are volatility and manipulation. It’s like the wild west or an oil boom, without any U.S., state or tribal regulations, and no regulatory bodies to give certainty to the crypto-currency industry. All the FUD (Fear, Uncertainty, and Doubt) keeps the average person on the sidelines.”

The Tribal Reserve uses a Simple Agreement for Future Tokens (SAFT), which allows damages and enforcement rights over token dilution and volatility as a covenant in relation to the token issuance timing and escrow.  The White Buffalo Coin is indexed and the floor value is escrowed and contractually locked at $1 USD.   “It’s a psychological thing”, says Moore.  “If cannabis companies know they can use White Buffalo Coin (WBC) to pay their bills to other cannabis companies electronically and their customers can pay for cannabis products using WBC, and the value of the coin will be $1 USD or more per coin, it becomes just like using U.S. dollars.  Except on a good day you might get an up-side.  With high liquidity and fast transaction times, the customer can avoid slippage.”

Rick says that the Tribal Reserve Charter mandates revenue-sharing and two-thirds of the profits must be invested into social and ecological projects in Indian Country. The subsidiary, PAY-TRAK is majority (51%) owned by the Tribal Reserve and the minority interest (49%) is owned by the private sector. These ownership proportions allow treatment as an Indian-owned entity with federal tax advantages in Opportunity Zones and with the New Market Tax Credits. The Tribal Reserve has an inter-tribal agency charter to run a “Credit Program’ and a U.S. Treasury (CDFI Fund) certification as a Community Development Entity (CDE), which allows the business cluster to create subsidiaries and pass- through tax credits.

“Oklahoma Indians have persistent poverty and the highest incarceration rates in the world with a disproportionate number of Natives locked up. Many of those are serving time for marijuana. The more successful we can become the better we can serve our communities.  All the projects we choose must be socially responsible and green. We believe in making Seventh Generation decisions to protect our great grandchildren’s grandchildren”, says Moore.

The Tribal Reserve subsidiary, Pay-Trak, and its White Buffalo Coin are the beta test for the Tribal Reserve’s self-regulation initiative.  The Tribal Reserve Board is vetting applicants from the crypto-currency industry to serve as commissioners on a tribunal overseeing the licensing and oversight of exchanges and ICOs and to help find suitable projects to business locate in Indian Country communities.

Pay-Trak and White Buffalo Coin are based in Oklahoma, which coincidentally just legalized medical marijuana in June 2018.  Rick, a 30-year American Indian Tribal attorney, is an expert with oil and gas and tribal law and has studied blockchain and crypto-currency markets for over eight years.  The U.S. Supreme Court and Congress recognize the right of the Tribes to govern themselves and license and regulate activities like tribal casinos and pay-day loans. Neither of the Tribal Reserve’s authorizations as a U.S. Treasury or Oklahoma Indians’ Credit Program are limited by the federal banking ban on cannabis or the federal limitations on banks to be disallowed to hold and trade crypto-currencies.  “We were the first company to conceive and to implement this Tribal Reserve system in 2001” says Moore. “We first started out with energy projects but did not have a lot of success. However, the oil and gas experience is instructive, crypto-currency and cannabis resemble the early oil booms, what we call wild-catting, where the laws had not been worked out.  We feel it is time for us all to come together to solve the waste, greed and fraud problems in the crypto-currency and cannabis industries using blockchain and appropriate regulatory oversight.”

Moore says that the intellectual challenge and personal rewards of being able to help the crypto-currency and cannabis industries, while at the same time solving problems for the Nation and his state is an old lawyer’s dream come true, even more so because he can make shareholders and token holders happy, while helping his Indian people.

With cannabis being newly legal in Oklahoma, the timing is perfect for the Tribal Reserve subsidiary, Pay-Trak and its proprietary token, White Buffalo Coin to prove they can help Oklahoma and the nation to manage cannabis transactions (business to business and business to consumer) and bring together regulations and commissions to help the nascent crypto-currency space. “We can help both the Oklahoma Tax Commission and the cannabis industry with rapid deposits into their bank accounts using electrons. Cash is dangerous in cannabis businesses, especially when opiate and meth addicts are in desperate and persistent poverty.  We can see that there is an opening to solve lots of society’s problems and the crypto and cannabis communities are filled with optimistic and caring people to help out.”

But Moore knows that “it takes a village” to create a successful new crypto-currency that will win acceptance with crypto experts and acceptance by the public.  So, Pay-Trak is working with expert partners in blockchain technology, crypto-currency advisors, Blockhold Capital (, banking software technology, and the experts in the cannabis industry, U.S. Cannabis Pharmaceutical Research and Development (

Michael Patterson, CEO of U.S. Cannabis understands that a team approach is what is required to bring real-world solutions to implementing wide spread usage of crypto-currency technology within the cannabis industry.  “When Oklahoma legalized medical marijuana with 57% of Oklahoma citizens approving question 788, there was no limit on the number of licensed marijuana businesses allowed in the state.  As of October 2018, the state of Oklahoma already has over 1,100 licensed marijuana businesses!  With no bank in Oklahoma agreeing to take marijuana money, there is a real possibility of a public safety nightmare coming to the state with lots of cash being exchanged and nowhere to put it.  Since the entire legal cannabis industry is just getting started, it is a perfect opportunity to work together to make Pay-Trak and White Buffalo Coin simple to use to allow for adaptation across medical marijuana licensed businesses and customers across the state.”

The Tribal Reserve Board has passed a set of interim I.C.O. (Initial Coin Offering) and exchange licensing rules, as well as regulatory and oversight provisions which it has posted on its web site for crypto industry comments. “That our sovereignty as a tribal agency lets us pass crypto-currency regulations governing the Internet is unquestioned.  Cyber-space, blockchain and the Internet free the industry to choose the most favorable home jurisdiction. We are asking the crypto-currency industry to join us to help craft rules to govern ourselves and to establish a self-governing commission before other governments jump in and ruin it for us.” Crypto-currency is still in the “wild west stage”, and Moore sees an opportunity to allow a new class of traders in the more than 450 tribal casinos.    The proposed commission would be the first United States jurisdiction to comprehensively license and regulate exchanges and ICOs.  “If Malta can rule crypto from the middle of the Mediterranean, we can help our crypto-currency industry right here from the heart of Indian Country USA.”, say Moore.

Moore states that Pay-Trak and White Buffalo Coin are looking to go live in the first quarter of 2019 in Oklahoma, with goals of national and international by the end of 2019.  “Once we prove the concept in Oklahoma that blockchain and crypto-currency can be used to solve great societal problems of cannabis legalization, help finance positive social programs, and make investors’ money, we will be ready to expand across the U.S. and the world. The world needs crypto-currency to solve a lot of problems, and we plan to be the team to make that happen for both the cannabis and the crypto-currency industries.”

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