Will SolarisBank’s Blockchain Factory Catalyze Cryptocurrency Industry Growth?
The cryptocurrency industry has been growing exponentially due to its potential to solve mainstream challenges across sectors. However, cryptocurrency firms in Europe have been facing challenges in accessing financial services from conventional banks. In June this year, the Polish crypto community filed a complaint against 15 financial institutions with the competition and consumer protection office for outrightly declining to open bank accounts for crypto-based companies.
These kind of challenges could hinder implementation of numerous blockchain-based projects that are designed to address pressing problems in different sectors. Such innovations include facilitation of precious metal trading as designed by AnthemGold, improvement of parent-children communication as presented by URAllowance and fostering collaboration and networking in the banking sector as designed by Bank52.
Blockchain-based solutions are also available for customers and investors. Through BlockVest, investors can manage their portfolios of digital assets while IOU provides e-commerce platforms with customer satisfaction solutions. At the same time, Bitque uses blockchain to foster adaptability in the decentralized world of cryptocurrencies while OptDyn uses blockchain to power Subutai, the first intelligent, peer-to-peer cloud computing platform.
These and other blockchain-based companies can now access cryptocurrency accounts in SolarisBank through ‘Blockchain Factory’, an exclusive financial services package that enables crypto-based firms to transact in fiat currencies through their blockchain accounts.
Just the Beginning
According to media reports, SolarisBank has acquired the licenses it needs to provide crypto-based firms with bank accounts. According to Antonio Sainz, co-founder and CEO at INCLUSIVITY, these licenses do not mean that the bank can operate cryptocurrencies. Rather, they allow the bank to partner with cryptocurrency businesses.
He says, “I would like to clarify that SolarisBank has not acquired a license that allows it to operate in cryptocurrencies. On the contrary, SolarisBank uses its bank license to offer other companies the possibility via partnership to operate with them and cover the market share of cryptocurrencies.”
At the same time, SolarisBank seems to have taken a step that clearly positions it for the future. This is because in the coming years, all European Banks will be required to serve all companies that provide financial companies.
“By the end of 2018, the European Directive, PSDS, which involves the release of the banking market throughout the European Union comes to force. Every bank has to allow access to any European company offering financial services, via APIs, to customer accounts. It is the end of monopoly of traditional banking in the financial market. Banks also need a license in each country where they operate, with the PSD2 a financial services company with a license in a country can offer its services in the 26 States of the European Union. It is the beginning,” Saiz adds.
Even so, concerns have been raised on whether corresponding banks and regulatory agencies could hinder SolarisBank from implementing its blockchain factory services effectively. According to Jess Davis, CEO at Uberstate, regulatory agencies may not do much to thwart SolarisBank’s efforts to serve blockchain businesses.
He says, “Regulatory agencies may be able to do little to thwart international or inter-regional trade, more so for just a bank, if they place stringent screening requirements on customers or businesses opening blockchain accounts. The real issue with compliance here is that countries outside the G20 may be considered to pose higher risks for clients to accept these payments from. This does change the current KYC rules and regulations as blockchain is borderless and can be sent or received from wallets in any country on the planet.”
Also, fraudulent ICOs could put the bank on the wrong path and thwart its plans to serve blockchain businesses according to Steve Kuh, CEO of Bonafi.
He says, “Liabilities on fraudulent ICOs. Most banks are staying away from dealing with cryptocurrency due to fraudulent ICO and its related liabilities that can hook all the way to the banks in the loop. Thus, one way to thwart SolarisBank’s effort is to find out later that one of the crypto accounts turn out to be fraudulent and that it would become liable for a large sum.”
Disclaimer: David Drake is on the advisory board for most of the firms mentioned or quoted in this article.