British cryptocurrency firn Ziglu launched a peer-to-peer payment service allowing users to send and receive both crypto and fiat currencies.
According to a Sept. 7 announcement, Ziglu became an Electronic Money Institution (EMI) authorized by the U.K.’s Financial Conduct Authority (FCA). The bank challenger obtained this authorization quite quickly, considering it only launched in June.
The new authorization allowed Ziglu to launch its peer-to-peer transaction service that enables users to instantly send each other money in any of the currencies supported. The company’s CEO and founder Mark Hipperson commented:
“Paying people should be instant, free and easy regardless of their location or the currency, whether that is splitting the cost of your Airbnb or sending a Bitcoin birthday present.”
The digital assets supported by the peer-to-peer transfer feature include cryptocurrencies bitcoin, ether, XRP, bitcoin cash and litecoin.
It is worth noting that crypto assets held on the platform have to be acquired through the Ziglu and can only be sent to other clients of the company, not to external wallets. This eases the regulatory complications of know-your-customer/anti-money-laundering compliance that arise when an institution cannot determine where funds are being sent, and who sent them.
Customers’ digital assets are insured against cyber-attacks up to £50,000, and fiat currencies are safeguarded in a segregated account, the company said. It also promised that customers’ identities and personal details will be kept private.
According to European banking transparency initiative The Banks, an authorized EMI can legally issue electronic money. Electronic money—also called e-money—is a payment instrument that can be considered a form of cash or monetary value stored electronically. Such institutions have several benefits over traditional banks:
“Compared to traditional and even direct banks EMIs have a lot of advantages: EMIs do not have to comply with capital requirements, do not have to participate in deposit guarantee schemes and do not have to implement strict KYC/AML requirements applied to banks.”
There are currently 393 EMIs operating in Europe, 186 of which are located in the United Kingdom—equivalent to a staggering 47%.
Not the first crypto firm
The authorization could be viewed as a sign of newly found openness shown towards crypto by the U.K.’s FCA. Still, those familiar with the space will know about Revolut—a British EMI that, not unlike Ziglu, allows customers to buy and send cryptocurrencies. It is an EMI as well. Interestingly, the U.K.’s FCA recently showed interest in blockchain technology.
As Modern Consensus reported in early May, at the time the regulator sped up plans to launch a blockchain-focused digital sandbox. The initiative is an answer to the ongoing coronavirus pandemic as it aims to make it easier and safer for blockchain firms to experiment with projects and platforms tackling the COVID-19 pandemic.