Litecoin (LTC) Foundation has acquired a 9.9% stake of WEG Bank AG, a Germany-based bank through a new partnership TokenPay.
The deal comes in an effort by both the Litecoin Foundation and TokenPay to bridge the gap between the old and new financial worlds while bringing crypto to the masses.
Deal and partnership details
Earlier this year, TokenPay Swiss AG acquired 9.9% stake in the German bank with “options to purchase approximately [up to] 90% overall of the bank” subject to government approval according to the official press release.
On July 10, 2018, TokenPay announced that it would be selling the 9.9% stake to the Litecoin foundation in exchange for the foundation’s technology and expertise. This non-cash deal does not include the options.
TokenPay simultaneously announced that it had purchased a new 9.9% stake in WEG Bank. Considering that it ‘sold’ its original stake, the company was likely able to exercise some of its options without requiring regulatory approval.
Under German law, an institution or body isn’t allowed to own more than just 9.9% of a bank, unless it gets approval from regulators. We will likely see TokenPay acquire the remaining 70.2% after approval is granted by Germany’s Federal Financial Supervisory Authority (BaFin).
What’s the WEG Bank?
The WEG Bank is a leading institution in German popularized by its numerous projects in real estate renovation. It was founded in 2015. According to the press statement released on July 10, the bank will create a new division targeted at consumers and merchants who wish to integrate FinTech as well as blockchain technology into their businesses.
Matthias von Hauff, the founder, and CEO of WEG Bank AG have said that:
“The partnership with innovative institutions such as TokenPay and Litecoin might at first come unexpectedly for a very conservative institution like us. But we have thoroughly and diligently examined the prospects of a common future, and we became convinced that the future of banking will make adoption of such modern payment methods inevitable. We are therefore proud to have teamed up with the best in the field.”
Partnership a win for Litecoin (LTC)
It is clear that this partnership will greatly benefit TokenPay. It provides them with a platform to access a huge customer base that would drive the adoption of its debit cards.
However, Litecoin also has a big opportunity to drive its own adoption case by leveraging TokenPay’s solutions. According to Charlie Lee, Litecoin founder:
“This partnership is a huge win-win for both Litecoin and TokenPay. I’m looking forward to integrating Litecoin with the WEG Bank AG and all the various services it has to offer, to make it simple for anyone to buy and use Litecoin. I’m also excited about Litecoin’s support in TokenPay’s eFin decentralized exchange.”
Places where LTC debit cards could be used
Litecoin is already gaining widespread use via its aggressive #PayWithLitecoin campaign. If the partnership works and ends up seeing LTC debit cards released, it could take the coin to the cusp of mass adoption.
TokenPay is building an exciting ecosystem by which LTC can gain a lot of use. Apart from venturing into merchant services, the start-up that has been described as “bitcoin on steroids” has interests in the:
- banking sector;
- escrow services;
- gaming industry;
- e-sports; and
- employment services
All these are areas LTC could be accepted when the debit card comes out at the end of the year.
The LTC Foundation wants to see the coin adopted and accepted as a payment currency. Merchants and vendors find it suitable compared to Bitcoin because it offers users the access to its fast transaction speeds and very low fees.
For Litecoin (LTC), this is an opportunity to bring more users on board. For TokenPay, they have one more vehicle to enhance the growth of the TPAY cryptocurrency and its entire ecosystem. In the end, the venture will greatly enhance the two companies. The goal is to focus on those areas that are critical towards achieving growth and global adoption.
TokenPay is a product of TokenPay Swiss AG, a blockchain-based company that seeks to take blockchain adoption to the next level. The project has some of the best blockchain features, including Bitcoin’s cryptographic technology. It uses a proof-of-stake consensus mechanism and for enhanced security and privacy, employs the use of Tor IP.
Similar features are applied across its several top-class assets and projects that include EFIN Coin, the eFin Decentralized Exchange, TokenSuisse Asset Management and the TokenPay Multisignature Transaction Engine.
Once TokenPay acquires the remaining 70.2% of WEG Bank, it’s expected to see tremendous growth. But before that, the latest partnership with Litecoin will not merely add to the one agreed to with Verge. It’s going to give TPAY, the TokenPay native token, an upper hand in terms of strategic marketing and mature blockchain technology.
In addition to what Verge currency offers, TokenPay has indicated that it expects to add “several hundred thousand customers to its debit card solutions platform in the near term.” It will benefit greatly from the experiences gained by Litecoin’s technical experts going into the future.
What led Litecoin (LTC) and TokenPay to partner
The idea that a TokenPay-Litecoin Foundation partnership was a possibility took a serious turn after Verge (XVG) partnered Pornhub. At the time, Charlie Lee had indicated that the adult entertainment giant had erred in partnering XVG and not a serious coin like LTC or BTC.
That got TokenPay CEO Derek Capo by surprise and one his initial remarks were to lambast Lee. He had asked on Twitter what LTC had done to help Verge secure the partnership. TPAY, as it turned out, had donated a total of 66.5 million XVG that made it possible for Pornhub to partner Verge.
What followed is that Derek Capo revealed that the start-up would be acquiring a stake in a German bank. He added:
“so when do you want to talk about a REAL debit card solution? We are buying 9.9% of a bank in Munich with an option to buy 90%. We have a whole ecosystem and plan in place. Let me know how we can work together. The battle between old and new world is just getting started”
It ended with an unofficial agreement to work together. Then on 9 May 2018, TokenPay announced the purchase of its first stake of WEG Bank. Speculation that the two were partnering has been gathering steam ever since. That’s until last week when TokenPay gave another clear indication that it was just a matter of time before an official announcement was made.