UK-based Blockchain startup Tramonex has been granted a restricted registration as a Small Electronic Money Institution by the Financial Conduct Authority (FCA) – and this is the first time this kind of financial services provider has been granted this kind of permission to issue electronic money.
In 2011, the FCA released the Electronic Money Regulations to provide certain financial service providers and institutions the ability to operate as a money transmission firm and payment facilitator. To be approved by the FCA and obtain an EMI authorization, a company must be fully compliant with local regulations, security requirements and reporting and notification requirements.
In order to remain as an EMI-authorized company within the UK, a startup needs to allocate a significant amount of resources and capital to ensure none of its operations are in conflict with the regulations imposed by the FCA.
Once an EMI authorization is granted, a startup can begin to issue, distribute and redeem e-money. That means a Blockchain startup like Tramonex can issue a legal Blockchain-based currency, facilitate payments, launch applications or service on top of its infrastructure.
Marc Avedissian, co-founder of Tramonex Labs, commented:
“Automation of payments using the blockchain and smart contracts will reduce costs of transactions, allowing for the adaptation of this solution across many different fields such as insurance, real estate and government, to name only a few. Previously the missing link was lack of regulation – Tramonex Labs is very proud to provide a regulated environment where digital payments can be executed in a secure and transparent way.”
Tramonex sees this opportunity as the first step in revolutionising payments on the blockchain. They say that with the reduction in cost and execution via smart contracts will come the elimination of the middlemen. One of the most significant outcomes will be ‘banking the unbanked’: enabling international payments for those who do not enjoy access to the traditional banking and financial infrastructure.