‘Blockchain island’ Malta will be home to world’s first cryptocurrency bank

Binance, one of the world’s biggest cryptocurrency exchanges by traded value, is planning to launch a new bank whose owners will be digital-coin investors, in Malta.

Now dubbed the blockchain island, Malta will host the future Founders Bank, Binance told Bloomberg, adding that it has taken a 5% stake alongside other anchor investors at a €133 million pre-money valuation.

The seasoned entrepreneur Michael Bianchi will be its first chairman. The board will include government blockchain advisor Abdalla Kablan, as well as Martin Bruncko, Andre Eggart, Pavel Bodark, Sonal Kadcha, Paula Pandolfino and Jonathan Gowen.

Bloomberg News said this push to bridge the digital-token industry with conventional banking was the brainchild of Binance CEO Changpeng Zhao, who said his platform expects a profit of $500 million to $1 billion in 2018.

Binance said the Founders Bank startup would be the first decentralized and community-owned bank in the world.

Founders Bank would conduct its offering through the blockchain-based equity fundraising platform Neufund, issuing its own “legally-binding equity tokens.”

The bank would need a license from regulators in Malta, a member of the European Union, and approval from the European Central Bank.

“This is fascinating, as a concept,” said Marc Ostwald, global strategist at ADM Investor Services International in London. “Obviously, they’ll have to meet anti-money-laundering regulators. The question will be, how do regulators view this?”

“We are honored to be chosen as the location of the first global community-owned bank,” said Silvio Schembri, junior minister for financial services, digital economy and innovation within the Office of the Prime Minister of Malta. The equity-token sale would be conducted under German regulations in collaboration with one of Europe’s major stock exchanges later this year, Binance said, without identifying the exchange.

The news comes a week after Malta passed three laws aimed at encouraging blockchain-based businesses to set up in the country. Binance said in its statement that the bills “created a fertile environment for blockchain companies and cleared the uncertainties surrounding the market for decentralized assets.”