Banking

Startup Holds Equity Crowdsale For Banking License

Blockchain-based challenger bank BABB — which stands for Bank Account-Based Blockchain — announced it will be holding an equity crowdsale to cover the costs of obtaining a banking license.

BABB is a startup developing a blockchain-based bank that aims to decentralize services and open up access to a bank account for individuals around the world. The company deploys the use of smart contracts stored and transferred on blockchain, utilizing technologies like machine learning, artificial intelligence (AI) and biometrics to augment its services. Customers simply open an account on their smartphone by taking a selfie and saying a passphrase. In addition, they gain access to a peer-to-peer (P2P) network, which makes it quick and cheap to transfer money, lend to and borrow from other users, and exchange currencies.

This crowdsale will give investors the chance to own equity in the company. It is expected to open to the public next week, following a private funding round.

The company has already successfully raised $20 million in a token sale used to ensure a long runway for the software development, as well as launch the company’s platform, app and payment card. Now, its equity crowdsale will allow BABB to expand its efforts by funding the legal and regulatory costs of becoming a licensed bank. The crowdsale will be offered through Crowdcube, with investors who participate receiving equity in BABB Group, the parent company of both the bank and the software company.

Shareholders will have ownership, voting and preemption rights.

Earlier this year, BABB named bank technology veteran Paul Johnson its new CIO. Johnson previously served as chief of another U.K. challenger bank Aldermore, at which he oversaw its IPO in 2015.

“I can only see blockchain technology as the next step in this evolution of payments and asset transfer in the future,” he said in a statement announcing his position at BABB. “The BABB proposition highlights this extremely well with the ‘everyone is a bank’ concept, and I am excited to be joining the team to build this platform.”

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