The Financial Supervisory Authority (FME) of Iceland, the primary financial regulatory body of the country recently approved a blockchain-based e-money firm.
FME announces blockchain firm’s approval
On June 14, the FME announced that it had approved Monerium, a Reykjavik-based blockchain software company. The firm is backed by Enterprise Ethereum Company ConsenSys and aims to provide fiat payment services to Icelandic users using the Ethereum blockchain.
Monerium is the first company to work under the electronic money framework of Europe. It is a significant regulatory framework as it allows firms to offer fiat currencies as e-money on a blockchain-powered network. It could be used across the European Economic Area (EEA), broadening the reach of blockchain systems in the developed world.
Interestingly, Monerium’s co-founder is Jon Helgi Egilsson, who was the former chairman of the Supervisory Board of the Central Bank of Iceland. He is expected to announce the news on June 15 during a digital currency conference in Stockholm. The company’s co-founder and CEO Sveinn Valfells noted that Europe has a robust electronic money regulatory framework, though it is used primarily for prepaid debit cards.
Valfells further noted that creators of other fiat-based stablecoins create products first and look for regulatory approvals later. However, Monerium’s product was created, keeping the regulator’s approval in mind. The firm considers its regulatory approval a competitive advantage over similar products. Valfells said that fiat will be the currency that most people will be using in the short and medium term, refusing to make any tall claims about the future of digital currencies and their global acceptance.
What does the project promise?
CoinDesk reported that Monerium will be launching a blockchain-based digitized fiat currency, which will be linked to the Icelandic krona (ISK). It will be used to enable cross-border payments in the currency without the need for financial middlemen. The digital krona will be available throughout the European Union. As the project progresses, it will be introduced to other countries as well, depending on regulatory policies and approvals.
ConsenSys, the backer of Monerium incubates firms that engage in innovative projects related to the Ethereum blockchain. It participated in the firm’s seed funding round of $2 million in January this year. ConsenSys co-founder Andrew Keys said at the time that investing in Monerium falls in line with their purpose of creating the infrastructure needed for a self-sovereign and decentralized future.
Though Monerium will begin with Ethereum, it also plans to work on different types of blockchains in the future.