Change Financial backs bank-friendly cryptocurrency that removes anonymity
Digital bank Change Financial is seeding a new cryptocurrency that removes anonymity in business transactions.
Transactions in cryptocurrency are usually anonymous — which creates hurdles in mainstream banking because of the potential for money laundering.
Change Financial plans to invest in the Ivy Project which owns IvyKoin — a blockchain based cryptocurrency that has the same characteristics as common digital money units such as bitcoin or eretheum but can be voluntarily de-anonymised to reveal details about a transaction.
Change (ASX:CCA) has already developed an internal blockchain based ledger system as part of its consumer banking offering and says investment in the new cryptocurrency was a natural progression.
Change plans to acquire a 33 per cent of the Ivy Project for US$100,000 ($130,000), which brings together fintech, security and regulatory experts.
Change’s shares gained 5 per cent to 81c on Tuesday, valuing the company at $49 million.
“Blockchain and cryptocurrency are rapidly evolving as an innovative solution in storing data, moving money and conducting transactions,” chief executive Ash Shilkin said.
“We have grown to service 130,000 banking customers in the US, and this investment will extend our reach into business-to-consumer and business-to-business banking,” Mr Shilkin said.
While crypocurrencies in their current form have been met with some trepidation from banks, IvyKoin is designed to provide more transparency and data access for transactions over $10,000.
IvyKoin would still adhere to cryptocurrency’s principals of being recognisable, transferrable, immutable and limited in supply — and hopes to be used globally for business transactions.
“By combining decentralised blockchain principles with identity verification, a digital ID is created and assigned to every online transaction,” according to the Ivy Project website.
“This helps our organisation check the identity of every transaction in real time, eliminating the rate of fraud and improving compliance with anti-money laundering regulation.
“Customers can store their encrypted identity and payment specific transaction data, and control how much information they share with other entities.”