On Thursday (12 July 2018), a FinTech startup called Founders Bank announced its Binance-backed plan to set up the world's first "decentralized, community-owned, and blockchain friendly" bank in Malta ("Blockchain Island"). The company aims to launch sometime during the first half of 2019, providing that it receives a banking license from Malta Financial Services Authority (MFSA), which should not be too much of a problem given the support of Silvio Schembri, the Junior Minister for Financial Services, Digital Economy, and Innovation within the Office of the Prime Minister of Malta:
"Yet again Malta proves to be the ultimate destination for innovative companies changing the world for better. We welcome Founders Bank with the utmost excitement and hope that their fintech solutions will attract even more world-class companies to our #BlockchainIsland. We are honoured to be chosen as the location of the first global community-owned bank that cares so deeply about transparency and regulation ."
According to a Bloomberg, crypto exchange Binance has a 5% stake in the new company "alongside other anchor investors at a 133 million euro ($155 million) pre-money valuation." The support of Binance is not surprising since Binance has chosen Malta as its new base of operations and the focus of the proposed new bank is serving "tech and crypto businesses."
Founders Bank is planning to raise additional funds through an Equity Token Offering (ETO) on Neufund, a platform for primary offerings of securities ("equity tokens") as legally binding smart contracts on the Ethereum blockchain. Neufund says such equity tokens are "technologically enhanced quasi-shares that are as easy to purchase and trade as cryptocurrencies, yet give the investors and issuers legal protection similar to classical forms of VC investing."
Michael Bianchi, Chairman and Co-founder at Founders Bank stated:
“Founders Bank is the missing piece of #BlockchainIsland on Malta. We are proud to announce our progressive banking solutions tailored for the needs of decentralised companies, with already existing support from the leaders of the blockchain industry, including Binance and Neufund. I am excited about the upcoming equity token offering when everyone will be able to become the co-owner of the company and shape the future of banking with us! "
And here is what Changpeng Zhao, Founder & CEO at Binance had to say about the company's latest investment:
"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.”
In its blog post announcing today's news, Founders Bank made the following interesting comment about its upcoming ETO:
"The equity token offering to be conducted on Neufund under German regulation in collaboration with one of Europe’s major stock exchanges later this year, will allow all market participants to become co-owners of Founders Bank. This is pioneering as it will allow our clients to decide on the development of the solutions they are using with blockchain-style governance model based on smart contracts."
On 4 July 2018, Malta became the first country in the world to establish a full legislative framework for distributed ledger technology. And the establishment of a crypto friendly bank on this island nation will only make it a more attractive destination for both new crypto entrepreneurs and existing crypto businesses currently based elsewhere.