Volt, an Australian neobank, has partnered with BTC Markets, a Melbourne-based digital asset exchange, in what is considered to be a world-first collaboration between a traditional regulated financial institution and a cryptocurrency platform.
According to BTC Markets CEO Caroline Bowler, the relationship would deliver integrated banking capabilities to BTC Markets customers via Volt’s banking-as-a-service platform.
“It’s so innovative, so forward-looking, a real feather in the cap for fintech in Australia,” she said. “It’s a global first, I haven’t seen anywhere else in the world that has a partnership of this kind.”
The merger took three years to complete, owing mostly to the regulatory hurdles that Volt had to overcome.
“The idea behind this really began out as a coffee conversation and an analysis of the pain points that BTC Markets was experiencing a couple years ago,” Bowler explained. “Volt was really foresighted in even having this conversation.”
Banks in Australia and around the world have been exceedingly wary about cryptocurrencies, even cancelling customer accounts for purchasing it.
More than a dozen Australian Bitcoin companies had their accounts blocked by major banks in 2015, according to the Australian Financial Review at the time.
BTC Markets, the smaller partner, had to show Volt that it had a comprehensive anti-money laundering/know your customer (AML/KYC) programme, which gave the neobank confidence to continue forward, according to Bowler.
Volt’s chief customer and partnerships officer, Andrew Clouston, told Stockhead that the bank aimed to help the 10% to 13% of Australians who wanted to buy digital assets.
Clouston stated that Volt has a list of companies wanting to join with the neobank that is “as long as both of my arms,” ranging from customer loyalty programmes to fintechs that have yet to acquire their first customer.
They will use their own Volt accounts embedded within the BTC Markets platform instead of putting their Australian dollars into BTC Markets as a result of the arrangement.
Under the Financial Claims Scheme, all funds in their accounts will be safeguarded by a government guarantee of up to $250,000 per account holder.
Internally, Bowler described it as a “Chinese wall,” although client interaction with Volt will take place entirely on the BTC Markets website.
Some features will be rolled out this year with others coming early next year.