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The Dawn of Decentralized Banking

July 12, 2018

 

By now, most of us that have been following the Cryptocurrency space know that Binance has moved to Malta. As of today, it has been announced that they will be using their investing wing to start the first decentralized bank that the world has ever seen.

 

The project, which will be called Founders Bank, had been estimated at a $155 million value even before companies began investing in it.

 

Judging by an original article on the subject by Coindesk, Founders Bank will essentially be completely run by the Blockchain. Investors will be able to continually invest in it using Cryptocurrency tokens called “equity tokens,” which basically equate to shares in the company.

 

Furthermore, just like Coinbase and others which we have spoken about recently in the context of becoming licensed, Founders Bank is also trying to do so in this case, with the Malta government.

 

As of now, the biggest stumbling block to its progress is exactly the fact that it is trying to be licensed, not just by Malta, but apparently also by the European Union, at large.

 

If, however, things do fall their way, then this bank will launch as a customer owned, decentralized entity, that therefore has no central control at all.

 

Despite Founders Bank’s lofty hopes, however, it cannot be called fully decentralized since it is effectively offering shares in its offering to companies like Binance, therefore, creating a responsibility to these companies to give them a return on their investment as it moves forward.

 

While Binance and its CEO, Changpeng Zhao seem clear that the bank will succeed given Malta’s recent history as the “Blockchain island,” earning the approval of regulators who are even partially aligned with the EU is another hurdle entirely.

 

To do so would be akin to dropping the first domino in the road towards the melding of the traditional finance space with the Crypto space, given the radical banking model being accepted by one of the biggest regulatory bodies in the world.

 

Whatever the case, Founders Bank may, at least, inspire other projects to push the envelope in that direction.

 

 

By: BGN Editorial Staff

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