Why the Creator of Litecoin wants to create scriptbank and what can go wrong?
Source:One of the most promising and controversial transactions in the history of cryptocurrency began with skirmishes in social networks. Since April, the founder of Litecoin Charlie Lee were exchanging sarcastic remarks with Director General of the payment service TokenPay Derek Capo. But after a while, their battle turned into a friendly conversation. The parties realize that share the same point of view: Scripturally required the Bank, ready to serve accounts of the exchanges and companies working with digital assets.
It became clear after the Foundation of Litecoin and start Capo was faced with the same problem — the banks refused to serve the accounts of organizations. Li pointed out that the lack of Pro-cryptocurrency Bank carries serious risks, up to the closing.
Banks closed the accounts CryptoStream or stop their service on demand regulators. We have seen many competitors have closed their projects due to the fact that you do not own the Bank.
Trying to solve the problem, the Foundation of Litecoin and TokenPay bought 9.9 percent of shares of a little-known German Bank WEG Bank AG is the maximum amount of securities which the company may purchase without approval of the regulator. Now the company agree with the German Antimonopoly service to buy the remaining 80 percent of financial institutions. The sum of both transactions was not disclosed.
But the possession of the Bank does not solve the problem — even if the regulator will give approval for the deal, Lee and Capo could face claims of the Central Bank of Germany, who with great caution applies to digital assets.
theProblems when buying cryptocurrency
Now, the difficulty of operations in a pair of Fiat-cryptocurrency experiences not only business but also private traders. When trying to buy coins for Fiat money exchanges require customers to register the card, and banks often cancel the transaction or process it within a few days. During this time, the course of bitcoin, which had planned to purchase a trader, can significantly change.
Another way is to use the payment services according to the type of BitPay to exchange Fiat currency for digital. However, such companies have high fee, and the users lose a lot of money in the exchange.
Capo and you want to perform operations on exchange Litecoin to Euro directly through a Bank account, reducing the time for approval of a transaction to several minutes. Entrepreneurs expect to start this service nine months after the approval of the transaction controller.
theWhy is it hard to start cryptocurrency Bank
But even if Capo and will receive consent from the German Antimonopoly service and the Central Bank, it will not guarantee unlimited liquidity. A former banker Barclays Simon Taylor says that financial institutions always look to the opinion of other banks to have the ability to move large amounts of around the world — in this case we are talking about payment system SWIFT and the Bank of Germany. If these organizations will be negatively disposed against cryptocurrency, they will be able to deprive WEG access to a Fiat.
Indeed, big banks typically are the ones who through the global corridor connects you with the dollar. I don't think KAPO and Lee achieved what you want. The mere purchase of the Bank will not give them that.
The President of the company BitAML Joe Ciccolo, which advises CryptoStream on compliance with legislation, considers that the establishment of kleptomanka only strengthen the attention of regulators in the cryptocurrency. For WEG, this will mean regular inspections and additional requirements for the implementation of legislation against money laundering.
In Itself, the governance and compliance anti-money laundering on a wide range of products — a very difficult process. This is a much higher barrier of entry than those faced by traditional financial organizations.
Ciccolo added that regulators took many years to pay attention to Bitcoin and other coins. And WEG will have to make great efforts to educate employees of the Central Bank.
Capo recognizes the difficulties when starting the Bank. The most expensive stage of the launch kleptomanka will be the reconstruction of all systems of WEG under the trade digital money.
We are conservative, so I want to create a Bank for payments in the cryptocurrency. We understand that this may take a long time — maybe years.
Why the Creator of Litecoin wants to create scriptbank and what can go wrong? appeared first on Two Bitcoin.
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