Cryptocurrency exchange Binance, digital asset focussed hedge fund Polychain Capital, along with Czech firm Carduus Asset Management have invested in Founders Bank, a Malta-based bank, that will provide service in cryptocurrencies. It is scheduled to start by 2020. till now, Founders Bank has raised $10M.
Paula Pandolfino, Co-founder of Founders Bank, said, that the bank planned to raise an additional $30M in the coming days.
Expressing her optimism about the future of cryptocurrency, she said,
Crypto will take over the world, and we need full banking services. We want to be that pillar of banking for the ecosystem to support how it gets done. If anything, we are learning how to wean off traditional banking and getting crypto to be that platform.
She also said that the bank will focus on building a Know Your Customer (KYC) compliant, anti-money laundering platform for providing fintech services. Founders Bank will learn from experiences of its backers like Binance about the pitfalls of a cryptocurrency entity and hopefully, will avoid them.
Binance has also promised, to become a client of Founders Bank when it opens.
Promoters of Founders Bank are in talks with EU regulators, to get a banking license for operating in Europe. It had planned to raise funds through a token sale but dropped the plan after concerns, that it would hamper its attempts to get a banking license.
Large banks have shunned cryptocurrency owning to its volatility and their inability to manipulate and regulate it. Very few banks like Silvergate Bank, Metropolitan Bank in the US, and WEG Bank in Germany cater to the cryptocurrency industry. Founders Bank is the latest addition to this list. The number of banks is not too low to create a regional monopoly, mainly due to the global nature of cryptocurrency and certainly not too large, to make it difficult for a new player to survive and thrive.
Malta has become known as “Blockchain Island” in recent times, as it has embraced the new technology. It passed 3 Bills last year for creating a regulatory framework for Blockchain-based entities. Several cryptocurrency exchanges like OKex, BitBay, Alphaex, and Nebula operate from Malta.