Blockchain e-money startup receives FCA licence

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A blockchain-based payments startup that has taken part in the UK Financial Conduct Authority’s regulatory sandbox scheme has been granted an e-money licence by the watchdog.

Billon Financial provides solutions for currency transactions that eliminates the costly mining and third-party exchanges associated with cryptocurrencies. Initial use case replaces incentives paid with anonymous pre-paid cards with an instant, fully digital, and secure experience.

The London and Warsaw-based Billon, a subsidiary of Billon Group, said that following the successful completion of its FCA Sandbox test, the FCA has removed the restriction on its registered status as a small e-money firm.

Billon says it’s pioneering technology disrupts the alternative payments market by enabling micropayments that were previously unprofitable to be executed instantly without traditional intermediaries. Billon’s technology allows corporate clients to manage thousands of loyalty incentive payouts themselves, and provides the ability to gather data on recipients during the transaction, a feat impossible with a one-way bank transfer or with a voucher.

The news of the granting of the licence comes as the FCA announced its second cohort of firms which have been accepted to this year’s sandbox programme.

In total, 24 startups have been accepted including a number of blockchain-based ideas including BlockEx, which plans a placement and management platform for bonds, Disberse, which is building a platform to track development and humanitarian capital, and Nuggets, a consumer blockchain application which gives users a single biometric tool for login, payment and identity verification.

Christopher Woolard, executive director of strategy and competition at the FCA, said: “The sandbox continues to grow in popularity and it is particularly encouraging that both the number of firms applying and accepted for testing has increased in cohort two.

“That means more innovative firms, trialling more innovative propositions to bring to the market. This is an important part of the FCA’s commitment to promoting innovation and competition in the markets we regulate.

The range of firms testing in the second cohort is diverse, covering a variety of geographies and sectors including wholesale, general insurance, payments, retail banking and retail lending. As well as the blockchain-based ideas, there are also companies working with artificial intelligence software to observe client behaviour and better determine client preferences before financial advice is given.

Speaking of the Billion licence award, the company’s chief executive and founder Andrzej Horoszczak, said the company was keen to capitalise on the official recognition that the FCA process represents. “We understand the challenges of operating within existing regulations, and we believe Billon’s FCA registration will help prove that you can encrypt everyday currencies without the need for an alternative cryptocurrency.