The founder and CEO of Moorwand, shared his view on particular payment licensing part, geographical differences of crypto markets and correlating trends in fiat and crypto industries.
As a frequent spokesperson on the current issues facing the European Payments’ Industry, he had an opportunity to look at helping companies who require BIN sponsorships and e-money solutions that other BIN sponsors would not consider.
Cryptocurrencies have created a more considerable regulatory barrier to overcome due to the risks to investors and the fact that individuals buying cryptocurrencies could lose out.
His company offers BIN sponsorship providing businesses with a single compliant connection to a variety of payment schemes including Visa and Union Pay, to allow for the processing of transactions and settlement of cardholder funds. It also proposes acquiring and electronic money/payments services, such as IBAN, eWallets, and wire transfers.
KYC (Know Your Customer)/AML (Anti Money Laundering) and securities regulation are areas of most concern to regulatory bodies, and these are the areas we are experts in when it comes to the crypto space.
What kind of crypto companies do you usually work with?
We are crypto agnostic, so we do business with companies wishing to provide cryptocurrencies, pre and post-ICO (Initial Coin Offering) solutions to a hungry market, as well as traditional fiat offerings. These companies are just a small slice of the client market with the biggest audience coming from the crypto exchanges and miners who require a simple solution to offer their customers a way to use their crypto in places that do not currently accept it as a mean of payment. So, a card is a way to bridge the gap while the market matures (which will take some time!).
What does the crypto market look like in the UK? Does it differ from other countries such as Malta or Switzerland?
I recently recorded a series of Payment Predictions 2019 videos with the Emerging Payments Association for the UK. One of the videos revealed my future insights on crypto. The UK Financial Policy Committee has assessed private digital currencies, including Bitcoin, LiteCoin, Ether (Ethereum), and Ripple, and concluded that while the Blockchain technology has potential is doesn’t pose a risk to financial stability in the UK.
The UK is looking at how to stop crypto becoming wayward, and the next phase (3.0) of regulation is going to be key, as it’s more about the asset or security token and the need to create a properly regulated basis. Investments or equities will be share tokens with the ability to freely liquidate without any third parties involved, so I see growth in non-utility tokens that look like more shares in a company or a unit trust.
The UK has an incredibly complex regulatory ecosystem, where all parties within that ecosystem need to be satisfied with the compliance of a new solution before they fully embrace it. Crypto is a puzzle that the UK regulatory industry is trying to piece together, along with other countries such as the US. Once the pieces are amalgamated, we will see a surge of crypto and blockchain technologies entering the UK market. The UK has a complex regulatory environment, but it boasts one of the most innovative hubs for fintech and payments in the world, so a workable regulatory crypto solution for these jurisdictions is just around the corner. However, I think smaller jurisdictions are currently reaping the benefits of crypto and ICO as they have less complex regulatory environments.
Countries like Malta, Switzerland, and Gibraltar are the most ICO-friendly jurisdictions pushing the regulatory boundaries on Distributed Ledger Technology (DLT) and ICO in their own ways. Switzerland is leading the charge on the regulatory front, especially with the removal of once protected financial practices.
However, each of these jurisdictions has merits and flaws in their approach to ICOs, so a company looking to launch a new coin/token needs to consider the jurisdiction that best suits their offerings as there is a whole realm of things to consider ranging from blockchain friendliness to banking, taxes, and stability.
What correlating trends do you see in fiat and crypto payments industries?
The crypto market is growing to meet the requirements of a changing world. While we still pay attention to the ‘security’ generated over time by the traditional fiat currencies, people – and their accounts – need a solution to fit the ‘constant traveler’ in what is a truly globalized world. Banks and bankers’ worst clients are high-risk customers and non-stable residents. The restrictive compliance and KYC procedures are due to human constraints, but crypto and blockchain embrace a self-decentralized process in a smart contract manner.
I believe we will see more banks and ICOs creating their own blockchain platforms and bespoke token and coins which will, in turn, become the new ‘bank currencies.’ Consumers and clients will use their bank currencies for payments. Banks and crypto in the future will be bank currencies, jurisdictional token, and bank-brand currencies will be non-government issue currencies the banks will administer. The bank will manage them in a decentralized way on behalf of clients. What could crypto payment providers learn from companies like yours?
Each one has different rules and conditions, which can be a minefield to negotiate. Crypto payment providers need to understand the importance of risk and regulation and adhering to these standards. However, with the growing confusion around what is and what isn’t possible within the increasingly complex world of payments legislation and rules around BIN, they need to seek guidance from partners who can offer simple, honest and transparent solutions. It is all about flexibility, transparency, operational efficiency and access to a range of payments schemes in a compliant style.