Digital money is not only the future, but it also represents the present, as evidenced by the developments in Iceland, one of the most stable countries in the European area. The nation has also shown a marked pro-blockchain stance since the technology became mainstream.
Now, Iceland will have a blockchain-based e-money firm, thanks to the approval of the country’s Financial Supervisory Authority, or FME, according to an official announcement this week. The FME is the nation’s financial watchdog.
Monerium: Backed by Blockchain Software Firm ConsenSys
The name of the initiative is Monerium, which is a project based in the country’s capital city, Reykjavik. As a matter of fact, Monerium is fully backed by one of the most widely known blockchain software firms in the planet, ConsenSys. The project will provide fiat payment services to people in Iceland whilst using the Ethereum blockchain.
According to the report published by a major crypto news site, Monerium is now the first company to operate with an electronic money model and framework, which lets the entity provide blockchain-based e-money services in the EEA, also known as the European Economic Area.
Jón Helgi Egilsson is the Co-Founder of the initiative. He used to be a Chairman of the Supervisory Board of the Central Bank of Iceland. The plan, this time around, is to develop and launch a blockchain-based fiat currency pegged to Icelandic krona (ISK) that powers cross-border payments in the currency with no middleman.
Programmable Money on Blockchain
“Monerium e-money encompasses the benefits of programmable money on blockchain, in addition to being the closest form of central bank money there is – based on a proven EU regulatory framework,” according to Egilsson’s remarks.
Egilsson also explained how an electronic money institution (EMI) works. “Unlike bank deposits, an electronic institution (EMI) must safeguard clients’ funds separately from any other financial activities, such as lending. Instead, customer funds are invested in a segregated portfolio of high-quality liquid instruments along with regulatory minimum reserves. The structure is similar to a high-grade money market fund.”
Operable in the Whole European Union
Initially, the digital or e-money, in this case the ISK, will be operable in the whole European Union (EU) and, if regulatory frameworks cooperate in the future, there is also a plan to introduce the e-currency to other nations, as well.
Sveinn Valfells, CEO and Co-Founder of Monerium, stated that “for practical purposes, fiat will be the currency most people and institutions will want to use in the near- and medium-term. And if you are touching fiat in any way, you just have to comply with the relevant regulations.”
ConsenSys took part in a $2 million seed funding round for the project that now has life of its own, at the start of the year. According to Monerium’s Co-Founder Andrew Keys, investment in the company paired well with the incubator’s purpose, which was the creation of “the infrastructure needed for a more decentralized and self-sovereign future.”
By Andres Chavez