The stake acquisition comes as part of Nimiq’s new strategic partnership with WEG Bank AG and Swiss-Maltese decentralized cryptocurrency exchange (DEX) Agora.Trade.
The three partners are working to create a crypto-to-fiat bridge that would allow for the seamless exchange of value between crypto and traditional banking systems, the announcement states.
As today’s post notes, their approach — using a decentralized exchange such as Agora.Trade as a vital component — focuses on crypto-fiat value transfers that do not rely on a single, centralized intermediary (such as a centralized crypto exchange or payment processor), and eliminate the need to entrust crypto asset owners’ private keys to a third party.
The evolving project, dubbed Nimiq Oasis, will aim to connect different cryptocurrency markets via the non-custodial exchange Agora.Trade to WEG’s system, which notably has access to the Europe-wide SEPA Instant Banking Network.
SEPA support could prospectively enable the project to roll out its crypto-fiat services with access to a network of over 2,000 banks across 20 European countries, Nimiq notes, proposing a targeted rollout time of before the end of 2019.
The partners’ aim to enable the exchange of value between the crypto and fiat systems includes a focus on making fiat deposits at WEG blockchain compatible. While today’s announcement only alludes to this in principle, an earlier post from Nimiq clarified that the project aims to:
“Establish the Euro itself as the programmable counterparty to a non-custodial cross-chain transaction. In simple terms, it means that in a transaction to buy or sell Crypto, the counterparty could now be a Euro account holder.”
Notably, both the Litecoin (LTC) Foundation and crypto-fiat payments firm TokenPay each own a 9.9 percent stake in WEG AG Bank — a fact that Nimiq today notes could open up the possibility of further collaborations between the bank and the crypto firms.
All three stakeholders’ shares are capped at 9.9 percent, as under German banking law, no entity can own more than 9.9% of a bank without additional regulatory approval.
Securing fiat liquidity for non-custodial, decentralized exchanges has to date been slower than for their centralized counterparts. Major American centralized crypto exchange Coinbase has gone a step further by pursuing its own federal banking charter since spring of last year.