By purchasing 9.9 percent of the bank, blockchain startup Nimiq now joins TokenPay and the Litecoin Foundation as part owners of the Munich-area financial institution. (Under German law, foreign ownership stakes of 10 percent or greater require additional regulatory approval.)
TokenPay became the first crypto company to acquire the bank’s equity in 2018, with Litecoin Foundation director Charlie Lee joining the bank’s board in a related move. This crypto contingent enlisted Nimiq to help develop infrastructure for external crypto-to-fiat conversions for banking clients.
Nimiq co-founder Elion Chin said in a statement:
“With Litecoin and Tokenpay as existing shareholders, new clients including [blockchain application platform] Lisk, and other key prospective partnerships, we believe WEG Bank is on the way to reinventing itself as a bank of the future.”
This cross-industry partnership could eventually offer fiat liquidity to decentralized exchange (DEX) users – if they pass the WEG Bank’s screening process.
These days, few DEXs can connect to institutional bank accounts for professional usage, unlike centralized exchange options. Meant to help facilitate the first DEX to WEG Bank AG transaction, the in-progress Nimiq system is scheduled for a limited launch by 2020. That said, WEG Bank AG will remain a traditional bank, never directly touching cryptocurrency.
“For the past 12 months, we have been looking at various ways to expand our core banking activities into the blockchain community,” WEG Bank AG CEO Matthias von Hauff said in a press statement about the effort in February. “With Nimiq, we have been able to develop not only a landmark payment interface which has the potential to revolutionize the way we deal with cryptocurrencies, but also an innovative and powerful partnership.”
For its part, Nimiq announced in a blog post that it would work with DEXs like Agora Trade to act as a “middleman to transfer funds between crypto markets and the traditional banking system,” charging a small percentage of transaction fees along the way. In return, the blog post says, Agora Trade will list Nimiq’s NIM tokens for cross-chain trades with ether and bitcoin without any exchange fees for NIM users.
Nimiq is also partnering with Binance-owned Trust Wallet, according to a recent blog post. The aim is to eventually give users across DEXs access to liquid euros for transactions made with bitcoin, ether or NIM through Nimiq’s upcoming “crypto-to-fiat bridge” called OASIS.
German money image via Shutterstock