Cryptocurrency exchange Binance is planning to launch a decentralized bank with an intention to bridge crypto industry with traditional banking. In this regard, Binance, arguably the largest cryptocurrency exchange with a daily trading volume of $1.50 billion, is investing in Malta-based Founders Bank, which intends to provide banking services, tailor made to the requirements of blockchain and cryptocurrency companies.
The Founders Bank will be Malta-based and fundraising will be done as per German law. Valletta authorities have welcomed the announcement which is expected to definitely receive warm response from cryptocurrency investors as well. The bank has also applied for a banking license in Malta. It needs to get approval from the European Central Bank to operate in Malta. Following regulatory approval, the Founders bank will gain the reputation as the first decentralized and community-owned bank in the world.
The project primarily revolves around the idea to establish a decentralized, cryptocommunity-owned financial institution. With regards to the banking products and other services, Founders Bank will provide bank accounts and credit cards to the cryptocurrency community. Furthermore, mobile and desktop web apps will enable users to operate their accounts through. Founders Bank is estimated to be launched in the first half of 2019.
Binance has revealed to Bloomberg that it has invested €133 million ($155 million) to acquire a 5% stake in the bank, alongside other anchor investors. Founders Bank is planning to conduct token offering through Neufund, ablockchain-based equity fundraising platform. Later this year, the legally binding equity token offering will be conducted according to German regulation in partnership with “one of Europe’s major stock exchanges.”
Dr.Abdalla Kablan, the government’s blockchain advisor, will join Founders bank’s board. Deloitte Malta’s director of audit Michael Bianchi will act as the Chairman of the board. The supervisory board of Founders Bank management will be made up of bankers, entrepreneurs, and industry experts including Martin Bruncko, Pavel Bodark, André Eggert, Sonal Kadchha, Jonathon Gowen and Paula Pandolfino.
Commenting on the decision to invest in Founders Bank, Changpeng Zhao, founder and CEO of Binance, said:
“We are not only excited to be one of the first investors of this inclusive community for this pioneering initiative, but also look forward to explore the full range of its banking services. We continue to be delighted by the vibrant blockchain opportunities in Malta, and look forward to launching more partnerships in the region.”
Commenting on the formation of bank primarily focused on cryptocurrencies, Silvio Schembri, junior minister for financial services, digital economy and innovation within the Office of the Prime Minister of Malta said
“We are honored to be chosen as the location of the first global community-owned bank.”
The news about the project has come out soon after Binance CEO Changpeng Zhao revealed that the exchange anticipates to rake in a net profit of between $500 million and $1 billion USD this year. The exchange has about 10 million users.
