Europe will see the first compliant e-money transfers on blockchain as Icelandic firm Monerium has been approved by the Financial Supervisory Authority of Iceland (FME) as the first electronic money institution.
The announcement, which became formal yesterday, means that the firm can now provide fiat payment services on blockchain throughout the European Economic Area (EEA). E-money is a regulatory framework that is well established in the region.
CEO and founder Sveinn Valfells claims that this is the first time ever that electronic money has been approved for use over a blockchain. That it is operational as a compliant entity under an established framework speaks volumes for its achievement, he adds:
“For practical purposes, fiat will be the currency most people and institutions will want to use in the near- and medium-term. And if you are touching fiat in any way, you just have to comply with the relevant regulations.”
It probably helped that Monerium’s co-founder, Jon H Egilsson, was also a past chairman of the Supervisory Board of the Icelandic Central Bank. Nevertheless, the news that Icelandic money will be transferred over the Ethereum blockchain is a big one, since there can be fiat movement without intermediaries now. Egilsson wrote:
“Monerium e-money encompasses the benefits of programmable money on blockchain, in addition to being the closest form of central bank money there is – based on a proven EU regulatory framework… Unlike bank deposits, an electronic institution (EMI) must safeguard clients funds separately from any other financial activities, such as lending. Instead, customer funds are invested in a segregated portfolio of high-quality liquid instruments along with regulatory minimum reserves. The structure is similar to a high-grade money market fund.”
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