The progress for cryptocurrency markets in North America has benefited so far from the lax regulatory environment. It allowed most of the major coins to slip under the radar of the major powers here, with only a handful of exceptions where the United States had to take a closer look. The relationship now that Facebook (FB.Q) has forced the government’s hand is now adversarial, ranging from benign contempt to outright hostility. The European markets are different.
In this case, we can’t really blame the government that much—Mark Zuckerberg is smug enough to make anyone hostile—but it doesn’t bode well for the nascent cryptocurrency and blockchain industries, trying to blaze a new trail to wealth creation. Thankfully, not every country on the planet is so hostile towards disruptive innovation as the United States.
That’s why NetCents Technology (NC.C) has gone on a European vacation with the slated goal of building out a growth plan for operations in the markets across the pond.
“A large part of our recent European trip was to further develop relationships with multiple European banks to expand our European footprint to meet this need. The Company believes that bringing crypto to the mainstream requires that retail investors are able to treat these products like traditional currencies – they should be able to deposit them at their normal commercial bank and have deposit insurance on those coins, and if they lose a password that they can obviously recover that currency (a potential risk with many current crypto accounts), our goal is to provide those banks the technology to do that in an efficient way,” said Clayton Moore, found and CEO of NetCents.
That’s definite part of what’s required to bring crypto into the mainstream, but there’s more to it than that. For example, cryptocurrency would have to accepted by most of the governments of the world in order to effectively become an alternative currency, which if the scrutiny that Facebook’s pet project Libra faced is any indication, will be an uphill climb.
Still, getting in good with the banks is a good step towards that end. The company hopes to accomplish two things with these negotiations:
- facilitating the ability to service its growing European merchant-base to support transaction growth; and
- licensing of NetCents’ Cryptocurrency Banking Stack to these European institutions, which are about to be allowed to receive cryptocurrencies for the first time.
The NetCents Banking stack is the throughroad that allows cryptocurrency accounts, transactions and functionality access into existing platforms for banks, financial institutions, and money service businesses. Licensing this technology offers a new revenue stream for the company and also helps them drive volume to the company’s exchange.
“European financial institutions are focusing on crypto as a way to re-define and differentiate their business in the current low-interest-rate environment. A recent indicator includes a consortium of 40 German banks that recently requested that BaFin (Bundesanstalt fur Finanzdienstleistungsaufsicht, German Federal Financial Supervisory Authority) award banks the right to receive and custody deposits of cryptocurrency,” Moore said.
The initial efforts of this new expansion will include the establishment of an office in Munich, Germany.