Why Litecoin's Creator Is Buying Into A Bank

Both the Litecoin Foundation, the non-profit that promotes the sixth-largest cryptocurrency and where Lee is a managing director, and Capo's Virgin Islands-based startup had encountered difficulty securing bank accounts - a longstanding problem for the industry.

Capo elaborated: "Some banks, they close down bank accounts if they get a whiff of anything to do with crypto. We saw a lot of competitors with similar offerings get cut off because they didn't own the bank and they didn't have control."

If all goes according to plan, not only will TokenPay and the Litecoin Foundation have a reliable banking partner, they would also transform WEG into an on-ramp for consumers worldwide who want to trade fiat for cryptocurrency or pay for goods and services with crypto.

That's why Capo wants to offer crypto debit cards and the ability to convert litecoin to euros directly through a traditional bank account, to make it a smoother experience for crypto users transacting in a fiat-dominated economy.

"We will have a say in influencing the bank to work on crypto projects," he said.

If traders pass all the know-your-customer and anti-money-laundering demands for a crypto bank account, they will be able to seamlessly cash out TokenPay's own token, known as tpay, from the exchange as fiat, plus buy or sell cryptos like litecoin without delay.

In addition to the promise of technical expertise and litecoin's relatively stable popularity among cryptocurrency fans, Capo said he gave the nonprofit equity in the bank based on Lee's massive online following, a marketing boon, and professional connections.

After TokenPay acquires a majority stake, the plan calls for the bank's CEO, Matthias von Hauff, to stay involved as WEG transitions to a retail bank with more consumer-facing products and services.

"I don't think it's going to achieve what they want it to achieve. I get the temptation to buy a bank. But buying a bank doesn't give you what you think it gives you."

Acknowledging the challenges, Capo said the first and most costly step of converting WEG into a crypto-savvy bank will be restructuring all of its KYC and AML processes to create a new crypto-centric model.