Tramonex, a London-based blockchain startup which previously received a £250,000 grant from the UK government, has now been granted a restricted registration as a Small Electronic Money Institution by the Financial Conduct Authority (FCA). This is the first time that this kind of financial services provider has been granted this kind of permission to issue electronic money.
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This registration enables Tramonex to conduct a pilot, in collaboration with another fintech startup alice.si, testing the use of smart contracts to manage donation transfers to a charity over blockchain in a regulated environment. During the test donors will transfer funds to Tramonex’s segregated account, and it will issue the according amount of e-money and automatically transfer that amount to charity, through a self-executing smart contract.
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Marc Avedissian, co-founder of Tramonex Labs, commented: “Automation of payments using the blockchain and smart contracts will reduce costs of transactions, allowing for the adaptation of this solution across many different fields such as insurance, real estate and government, to name only a few. Previously the missing link was lack of regulation – Tramonex Labs is very proud to provide a regulated environment where digital payments can be executed in a secure and transparent way.”
Tramonex sees this opportunity as the first step in revolutionising payments on the blockchain. They say that with the reduction in cost and execution via smart contracts will come the elimination of the middlemen. One of the most significant outcomes will be ‘banking the unbanked’: enabling international payments for those who do not enjoy access to the traditional banking and financial infrastructure.