London-based Fiat Republic has appeared on the B2B scene with aspirations to be a bridge between the worlds of banking and cryptocurrency.
The fintech startup is the creation of Adam Bialy. His experience in the sector includes Head of Payments at Sainsbury’s, ex-CPO of OpenPayd, and senior product roles at Raiffeisen Bank, Ukash, HyperJar and Onvi.
Fiat Republic reckons banks and crypto “don’t get along” – and it wants to help with an amiable approach.
The startup explains: “Crypto doesn’t have a voice in the banking world, not aided by the fact that the crypto leadership is inherently decentralised. This results in lack of bargaining power with banks.”
It believes there is a “lack of understanding and fear” of crypto business models by banks, which in turn can bring “hefty” risk premiums if the crypto platform is onboarded, or an outright refusal of onboarding.
Fiat Republic is vocal about how it sees the state of play. It reckons crypto platforms are “confused and intimidated” by the geopolitically diverse AML regimes and compliance frameworks in the UK, Europe and beyond.
It is a moot point. Others may argue that rules need to be obeyed to protect customers. For example, the UK’s Financial Conduct Authority (FCA) issued a consumer warning on crypto exchange Binance Markets Limited and the Binance Group in June. It’s a fluid situation as last month the FCA said it is “not capable” of properly supervising Binance despite the “significant risk” posed by the company’s products.
With that said, Fiat Republic adds that even if crypto platforms get access to banking they often need to integrate to multiple banking partners to get full coverage for their needs, and are in “constant fear” of being ‘de-risked’ by their banking partners.
Its solution to this situation is the aforementioned ‘bridge’.
Fiat Republic intends to offer a Banking as a Service API linking with multiple (and unnamed) “crypto-friendly” banks. There will be access to domestic virtual accounts and clearing schemes for real-time payments; and the company will work on solving crypto-specific problems like reconciling fiat deposits and automating withdrawals.
To ensure compliance – which has proved a tricky point for some in the crypto world – Fiat Republic will provide an onboarding framework audited by one of the ‘Big Four’. Without going into details, Fiat Republic will be “foundational” in securing relationships with tier 1 banks and regulators
All of that is certainly ambitious, but there is more.
Fiat Republic wants to create a consortium of crypto platforms to influence the banking community. This entails working hand in hand with regulators for the benefit of the crypto industry; and offering a uniform and transparent membership criteria to keep out bad actors.
At present, there is no specific launch date and Fiat Republic’s website has an option to ‘register interest’.
eWeek UK has contacted the company for more information.
Incidentally, last month eWeek UK looked at ‘How the Cryptocurrency Market is Evolving’ in the UK’s B2B sector.
As the article notes, the global cryptocurrency market already stands at $2.48 trillion (£1.8 trillion) and is expected to reach double digits in the coming decade.
