In few years, the crypto economy will exceed 10 trillion dollars. The crypto-banks will become a new milestone in developing the relationship between the decentralized economy and future daily life by expanding the payment infrastructure and creating new cryptocurrency payment scenarios and reducing interest rates.
But there are many concerns about cryptobanks. It happens because of the large number of scams in this field. Despite the suspicion of many crypto enthusiasts, the creation of crypto banks is a very promising industry with endless opportunities.
Bitcoin and other cryptocurrencies have been a fascination for stored value utility but people realize fast that it is hard to connect this revolutionary technology to “real world transactions”.
Why do we need cryptobanks?
Currently, you can pay for services and goods using crypto currency in a small number of enterprises, and the possibility of converting to fiat money exists only on exchanges that are inconvenient, hard and expensive to use. Cryptobanks will conduct standard financial transactions using crypto currency.
Cryptobanks will make it easy to turn crypto currency into fiat money and legally pay off (for example bitcoins), even with sellers who do not accept the digital currency.
Cryptobanks will also offer a mobile application that will provide a set of payment services to customers, including the issuance of virtual cards. All banking transactions can be made absolutely in any currency anywhere in the world. The mobile banking will instantly convert the crypto currency into fiat money and back.
Cryptobanks will give access to the bitcoin, altcoins and digital assets, including ICO tokens (if they are traded on exchanges).
Users of cryptobanks can transfer their crypto currency to the wallet.
The advantages of cryptobanks are the following:
• no more wasting time to wait to use your virtual card. The user will get his virtual card right after the registration.
• no limits on transaction volumes. This point is one of the most outstanding.
• no need for currency exchanges. Instant payments in money or international cryptocurrencies.
• fast transactions;
• transparency of operations and transactions;
• getting rid of unnecessary intermediaries;
• reduction of operating expenses.
What do we know about current situation in this field?
As the industry is very interesting and promising, new projects and ICO appear incredibly often and get good profits: TenX raised 80 million USD (245,832 ETH), Polybius raised 32 million USD (12 379 BTC), Monaco raised 25 million USD (71,392 ETH), TokenCard raised 13 million USD, Change & Bankera raising 75 million USD and 210 million USD respectively.
For example, TenX had been backed by Vitalik Buterin and Fenbushi Partners . But it still hasn’t worked out appropriately. TenX is a payment platform built on top of the Comit network. The payment platform gets rid of most of the fees associated with international banking services and transfers. The company will offer a physical map and a virtual map that will allow you to interact with products and services in the real world. Issue of such cards is not supported until MasterCard and Visa approval, but recognition is received from their partner — WaveCrest. Since October 2017 this bank has however changed the terms of cooperation by stopping support for TenX cards outside the European Union.
Polybius was aiming to provide a consulting service to banks and to be much more than a simple bitcoin exchange. Polybius seeks to make the use of the natural allure of a decentralized system to provide both security and anonymity to their clients, while still maximizing profits for all entities involved.
But now Polybius team has decided that they will not be a bank. After raising the money on the promise to be a bank, and not something else. Quote from their team:
When the project’s idea was being gestated, we thought to create a full-fledged bank that would offer all banking services from A to Z. But after having spoken with Europe’s regulatory institutions, we came to an understanding that from 2018 onwards, being a bank is not the most beneficial scenario. It is all about the upcoming changes on the banking market, and the data interchange — I mean the second payment services directive (PSD2), that will allow third-party agent access to European deposit-holders’ bank accounts”.
It’s also worth of mentioning few other companies:
- Datarius cryptobank (decentralized partially closed system). As a P2P platform, the system enables users to decide themselves whether to use any of variable services and applications. This allows to almost completely reduce transaction costs. Datarius serves as a direct link between lenders, borrowers, and the related services — managers, analysts, insurance companies, funds, trading terminals.
- Baanx. Baanx aims to enable adoption of crypto banking services during a once in a generation business opportunity and creating an “Amazon model” for Cryptobanks. Baanx, with OpenAPI make it easy for new FinTechs and any community or brand who needs to access Crypto services, to launch their product by “sharing” their bank licenses and products. This will create a Cryptobank network to eventually replace Traditional Banks. Baanx distributed Cryptobanks network aims to accelerate the adoption of crypto with services such as: Crypto balance Insurance, Crypto-Payments anywhere debit/credit cards are accepted, secure Exchanges, Crypto Merchant Services, Highly Secure Wallet Accounts, Lending and other Cryptobank services offered by 3rd party Fintechs.
- Lendo. Lendo Cryptobank offers ‘personal loans plus’ on the blockchain. Lendo Cryptobank has developed a blockchain-based platform that enables conventional loans companies to provide loans in Euros, Pounds or other fiat currency against cryptocurrencies as collateral. The crypto collateral will be stored in Lendo’s ultra high security Crypto Vault, built with Lendo’s proprietary software.
Assessing the current situation in the crypto currency market, it can be claimed with confidence that crypto banks are needed.
Cryptobanks allow to use cryptocurrencies in everyday life and to have mobile cryptobanking in smartphone: payments, transfers, currency exchange and instant loans. The great objective: the user replaces a bank.
So every person owning cryptocurrencies will be able to make payments in every shop.
But the main thing is to find Cryptobank with working product and usability. That’s what we are currently working at.
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