Binance Takes Big Step in Decentralized Bank in Malta
BY SHOBHIT SETH
Cryptocurrency exchanges are spreading their wings to new areas. Binance, which ranks among the top cryptocurrency exchanges in the world based on traded value, figures among a list of crypto investors who are backing a decentralized bank scheduled to be launched in Malta.
The new decentralized institution, called Founders Bank, will be established in the crypto-friendly Mediterranean island nation of Malta. Binance has “taken a 5 percent stake alongside other anchor investors at a 133 million-euro ($155 million) pre-money valuation,” according to a Bloomberg report. Founders Bank will run operations based on the blockchain technology in a bid to fill the existing void between traditional banking and the digital-token industry. It will also have an alliance with fundraising platform Neufund for issuing its own “legally-binding” equity tokens. Binance further added that the equity token sale will be conducted in accordance with the German regulations, though it did not reveal which European stock exchange will oversee the sale.
Promoters like Binance are looking to establish the startup bank as the first ever “decentralized and community-owned bank in the world, ”subject to securing the necessary permissions and regulatory approvals. The most important permits required to operate the new bank includes a license from local regulators in Malta and necessary approval from the European Central Bank (ECB), as Malta is a part of the European Union and comes under its purview for banking regulations.
Malta: A Preferred Destination for Crypto
While no timelines have been specified for the launch of Founders Bank, Changpeng Zhao, Binance’s CEO, took to Twitter to offer certain hints.
“Malta is the fusion ground for traditional and blockchain finance now. A lot can happen in 3 short months.”https://twitter.com/cz_binance/status/1017395909716410368
The development comes on the back of the island nation passing multiple favorable bills around the technology in recent times. The investment in Founders Bank by Hong Kong-based Binance goes in sync with their earlier stated plans. In March, Binance announced they want to set up an office as well as a fiat-to-cryptocurrency exchange in Malta—a jurisdiction that Binance sees as establishing itself as a “blockchain island.” Last month, Binance also announced backing the MSX Fintech Accelerator program of the Malta Stock Exchange that aims to support entrepreneurs and startups working in the fintech sector.
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