Just weeks after Ireland Inc announced the new platform Blockchain Ireland backed by government bodies such as the IDA, Enterprise Ireland and even the Department of Finance, the pillar banks are operating in reverse.
Last year, Enterprise Ireland funded two Irish ICOs, Confideal and Mingo. Both Irish companies received seed money and proudly displayed the backing on their websites. In September, both companies were asked to remove the logos from their websites, without any reason given.
Now the Irish pillar banks are saying they will not work with cryptocurrency companies. I discovered this first hand when I attempted to run a regular meetup group in a Bank of Ireland workbench earlier this year only to be told they were no longer hosting cryptocurrency themed meetups.
While that may be an inconvenience (and thanks for the free pizza last year) the fact that the banks are refusing to offer banking services to companies operating in this area is a more significant and detrimental development.
One such company to have their accounts frozen and ultimately closed is Bitcove, the Irish cryptocurrency exchange. What is ironic is that Bitcove, founded by Cork brothers James and Peter Nagle, had been accepted onto the Ignite incubation programme, which is backed by Bank of Ireland, and ultimately beat off a dozen or so other contenders to win the overall business final in 2015.
Bitcove began life as a simple brokerage to buy and sell Bitcoin but has in recent years expanded to cater for a number of altcoins including Ether, Litecoin, Ripple and Monero.
Peter Nagle explains that they based their business model on making it easy for Irish customers, in particular, to buy and sell cryptocurrencies.
“Part of our business model was to say customers could pay directly from their bank account into our Irish bank account creating a safe, fast and seamless service.”
Currently, Bitcove has 45,000 customers, most of whom are Irish. This is significant considering recent research from Amarach and Red Flag point to 120,000 Irish people holding some form of cryptocurrency. Nagle says:
“First of all we were told our accounts in Bank of Ireland were frozen. We were very shocked having worked closely with officials from that bank. Next up AIB followed suit.
“We had a third account with Permanent TSB and they gave us two months’ notice which allowed us to figure out how to continue in business.”
The decision was to open an account with a more progressive Banking partner in Europe, Mistertango. As a European bank, Bitcove can still accept SEPA bank transfers from Irish customers. SEPA is the standard banking payment method in Europe that is used between European banks and domestically between Irish banks. So it remains business as usual at Bitcove HQ and for their Irish customers.
“What this means is that we are now looking at Europe and abroad to grow our business. We have already opened an office in South Africa and are actively looking for cryptocurrency friendly countries to locate our headquarters.”
It would appear Ireland’s loss is Europe’s gain.