Binance Backs Decentralized Blockchain-Friendly Bank Project in Malta
The exchange invested 5% in Founders Bank, which still does not have a banking license and plans to be a community-owned lender.
Binance, one of the leading cryptocurrency trading platforms, has revealed its participation in a Malta-based decentralized crypto bank project, dubbed Founders Bank, exchange CEO Changpeng Zhao announced on Thursday. The project is in its early stage and still does not possess a banking license.
“Malta is the fusion ground for traditional and blockchain finance now. A lot can happen in 3 short months,” Zhao tweeted.
Binance, with its 5% stake in the project, is one of the two biggest investors, along with Berlin-based equity tokenization platform Neufund.
Founders Bank presents itself as a decentralized bank because it plans to be owned by the crypto community. The project will launch an Initial Coin Offering (ICO) with its own token and every coin owner is planned to be rewarded with a share in the future bank.
“Founders Bank will focus on serving tech and crypto businesses […] Users will be able to access their accounts from both the mobile and desktop web application and use them directly with credit cards issued by Founders Bank. We are currently awaiting a banking license in Malta,” the project said in a statement.
Approval from Malta’s banking regulator is only the first step in obtaining a license as the island is part of the Eurozone, where the European Central Bank (ECB) is the body in charge of all banking authorizations. National authorities make the initial license decision after jointly assessing banking projects with the ECB. The latter has the final decision on granting, extending or withdrawing a banking license in the euro area, ECB explains.
Binance is not the first major crypto company with a stake in a bank. This week, Litecoin Foundation, the body behind the LTC cryptocurrency, acquired a minority stake in Germany’s WEG Bank as part of a broader deal between the foundation and TokenPay crypto company.