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Binance Announced It’s Supporting The Development Of The First Ever Decentralized Bank

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Several investors are supporting the development of a decentralized bank that is to open in the island of Malta. Among these investors is Binance, which is the current leading crypto exchange company in the world, Coindesk reported.

Binance revealed that it has a five percent stake in the decentralized bank’s €133 million euro ($155 million) pre-investment valuation. Called the Founders Bank, this new form of financial institution aims to be the “first decentralized and community-owned bank,” essentially making token investors as the bank’s proprietor.

Founders Bank will run on a blockchain-based system and is set to coordinate with fundraising platform Neufund. This partnership will develop the issuance of the bank’s own "legally-binding" equity tokens, as revealed by Binance.

Of course, there are several hurdles to the realization of this endeavor. One of which – and perhaps this is the most challenging of them – is acquiring the necessary permits from proper authorities. Founders Bank would need to obtain a license from Malta regulators, as well as approval from the European Central Bank since Malta is a member of the European Union.

“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?”

Binance said that the equity-token sale of Founders Bank will be governed by German regulations. Moreover, the decentralized bank will be coordinating efforts with an unnamed European major stock exchange in order to conduct the sale.

Malta has been creating regulations surrounding the crypto market as it aims to be one of the major hubs for this particular industry. Just last week, Malta passed three laws that will encourage blockchain-based companies to put up headquarters within its borders. Binance explains that the laws have been made in order to create a defined rule that will oversee the regulation of decentralized assets.

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