Experiences and views of Mauricio Di Bartolomeo, the Co-founder of Ledn, on debanking challenges faced by the crypto startups and ways to circumvent them.
Contents
3 min read
For many crypto startups, debanking – being abruptly cut off from banking services – is a significant challenge. The Co-founder of Ledn, Mauricio Di Bartolomeo, delves into this issue, sharing insights on a potential way forward.
Persistence of Debanking in the Crypto Industry
Debanking remains a persistent problem in the crypto industry. Regulators around the world continue to grapple with the challenge of integrating digital currencies into their traditional financial systems. The situation is complicated by the fact that cryptocurrencies can be used for illicit activities, such as money laundering or financing terrorism.
Moreover, banks often perceive crypto-based businesses as high risk. As a result, they tend to avoid dealing with such companies to protect their reputation and compliance record. This reaction is what leads to debanking.
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Experience of Ledn
Having faced the debanking issue firsthand, Ledn offers a unique perspective. Di Bartolomeo reveals that the firm was initially unable to secure banking services because of its involvement in the crypto space.
However, he emphasizes the importance of persistence. Ledn eventually found a supportive institution after much effort and negotiation. This success, Di Bartolomeo believes, is largely due to the firm’s strong emphasis on regulatory compliance and transparency.
Established in 2018, Ledn provides credit and savings products that leverage Bitcoin. By offering services such as Bitcoin-backed loans and interest-bearing accounts, the company aims to bridge the gap between traditional banking and digital currencies.
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Advice for Crypto Startups
Di Bartolomeo has some advice for other crypto startups facing similar debanking issues. Here are some of his key takeaways:
- Stay resilient. It is crucial to preserve and keep looking for financial institutions that are open to working with crypto businesses.
- Be transparent. Companies should work to meet regulatory standards and ensure they are fully transparent in their operations.
- Seek out fintech-friendly jurisdictions. Some countries are more welcoming to fintech companies than others. For example, Canada has proven to be a favorable environment for Ledn.
A Rise in Crypto Acceptance
Despite the ongoing debanking issue, Di Bartolomeo is optimistic about the future of cryptocurrencies. He notes a gradual increase in acceptance and understanding of cryptocurrencies among financial institutions and regulators. As a result, he believes that it will become easier for crypto startups to secure banking services in the future.
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Di Bartolomeo also points out the growing popularity of Bitcoin among traditional financial institutions. He sees this as a promising sign that the cryptocurrency is gaining legitimacy in mainstream finance. This trend is further supported by various high-profile endorsements and investments in Bitcoin from major companies and renowned investors.
Conclusion
While debanking continues to pose a challenge for crypto startups, the experiences of companies like Ledn demonstrate that there are ways to navigate this issue. Maintaining a strong commitment to regulatory compliance, actively seeking out supportive financial institutions, and capitalizing on the growing acceptance of cryptocurrencies could pave the way for success.
John is a renowned journalist and blockchain enthusiast with over 12 years of experience covering global financial trends and cryptocurrency markets. His sharp insights and ability to break down complex topics make him a cornerstone of finandcrypto.com. Known for his analytical skills, John is passionate about delivering content that empowers the crypto community.
