Jeffrey Berns, the CEO of Blockchains LLC, a blockchain incubator and investment firm has bought a bank for $28 million. A report unveiled this news on July 1. The institution in question is the Kirkwood Bank of Nevada.
In the report, the CEO noted,
Purchasing the bank was basically security for me to make sure that Blockchains and myself had access to the financial system… But secondarily, it’s to create an environment where the blockchain ecosystem, the legitimate businesses out there who are trying to build projects that are going to empower the individual and better the world, that they have a bank that understands what they’re doing and isn’t fearful.
Reportedly, Berns began holding talks on this deal in 2017. A year later, he signed the acquisition agreement. Per the report, the $28 million included the bank’s price and capital for making investments. The financial details unveil that acquiring the bank cost $25 million. The CEO then set $3 million aside for investment purposes.
An Indirect Purchase
According to a report, Berns purchased the bank via a holding firm that is not associated with Blockchains LLC.
Only bank holding companies can own a bank, and if Blockchains owned the bank it would have to do reporting much like a bank holding company would. And my plans for Blockchains are to give a portion of the company away. I intend to turn over all the power to the users of the system. I don’t think the regulators would have ever been comfortable with that.
The president of the Kirkwood Bank of Nevada also asserted that there would be no management or operational changes. Nonetheless, Bern aims to draw up a blockchain-related contract between his firm and the bank in the future. This contract would see the two parties come together to create blockchain-powered banking solutions, which are set to go live in Q3 next year.
A Regulatory Sandbox to Test Blockchain Solutions
Berns believes there are a lot of possibilities in this collaboration between the bank and Blockchains. According to him, the partnership would act as a regulatory sandbox for testing blockchain solutions.
I needed a playground […] I needed a place to do proof of concept with regulators to show that loans can be done in such a way that if I have $1,000, I could invest 10 cents in 10,000 loans and, it would all be done on the blockchain and micro payments would be made, and there’s no funny business.
Do you think the Kirkwood Bank of Nevada will agree to partner with Blockchain LLC to develop blockchain solutions? Let us know in the comments section below.