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Last month, Geneva-based Mt Pelerin Group SA, a Swiss-registered company, became the first to incorporate its share into a token legally – solving the written form for the transferability of shares in Switzerland. The project is set to revolutionize the modern banking model by building a whole new kind of bank entirely on the Blockchain.
Mt Pelerin is currently holding a tokenized equity sale until Dec. 15th with the intent to sell 500,000 (5%) of its shares as MPS tokens.
Beyond Exploitation: The Flawed Banking Model
Banking has existed since the 2nd millennium BC and has brought notorious benefits to our development. In the past century, due to the rapidly improving telecommunication technologies, banks have managed to expand their reach globally and increase massively in size, gaining the trust to manage the assets of billions of people.
The downside is that today, that wealth being excessively risked through credit, scriptural money creation, and various other means to fuel the profit of banks. To top this off, banks regularly charge their customers various maintenance and service fees for services that are not perceived as value-adding anymore.
Despite being heavily needed, changes in the banking industry have been close to non-existent due to the burdensome regulation, high entry point, and competition. It is just a matter of time before the banking business model evolves, especially in the light of the recent financial crises and the public losing its trust in banks at a faster rate than ever. Mt Pelerin believes to have a solution for a new, different banking model that will change this paradigm.
Building the Bank of the Future
With its solution, Mt Pelerin intends to build a future-proof bank on the Blockchain. The company proposes a sustainable and compliant approach to the flaws in current practices with a new banking model, which will empower customers by giving them back control of their money, notably with growth and investment opportunities usually reserved to large corporations and investment bankers.
The bank that Mt Pelerin envisions consists of the following five key aspects:
Unlike most of today’s banks, Mt Pelerin will keep the integrity of customers’ deposits in reserve. This ensures the safety of people’s assets because the company will never touch nor risk them for its own profit. This will essentially render Mt Pelerin the safest bank in the world for its customers’ deposits, eliminating the possibility of a bank run. By refusing to leverage the belongings of customers, Mt Pelerin wants to send a strong trust signal necessary to attract people into its marketplaces, where the real game-changing value is.
Since Mt Pelerin will not utilize its customers’ deposits for profit, the company proposes the establishment of product marketplaces. On them, the bank will make a profit by charging a small fee on each transaction with the objective to provide radically cheaper services than modern banks.
These marketplaces will primarily collect products and offers from many external providers such as legacy banks, fintech, and crowdfunding platforms. This solution will empower customers with one place providing all the choice they require to fit their particular needs and conditions.
Beyond a greater choice, customers will be able to directly take advantage of this system by requesting or listing their own deals. For instance, an individual would be able to list a specific loan request and customize its parameters: amount, interest rate, term, etc. The laws of supply and demand, organized by Mt Pelerin’s market making robots, will then do their work. More interestingly, a customer would also be able to offer money on the loan marketplace, which could be used to satisfy the demand and generate revenue for the person (or company) through the loan’s interest rate.
The design of this marketplace system will only charge fees from the consuming counterparty of the given transaction while being free for the provider. For instance, someone providing a loan would not be charged any service fees except if the loan is provided by a bank or a credit institution. Mt Pelerin would operate as a broker/arrangeur taking a commission that is lower than the broker who seats in your couch to make you sign a deal.
The above is possible solely because the bank will be entirely based on the Blockchain. To put it simply, deposits and assets will be systematically tokenized on the Mt Pelerin platform. This ensures that those assets, such as the loan in the previous example, will be easily divisible, transferable at any time, and subject to high liquidity. By embracing this approach, Mt Pelerin intends to give access to asset classes that are only available today to large investors and financial institutions: credit, corporate finance, real estate, physical assets, the possibilities are endless.
Modular and Open Banking Platform
To attract as many institutions in its ecosystem as possible, Mt Pelerin is creating an open banking tech environment that will be of benefit for all of its participants. The entire system of the bank will be built as an open platform providing core services, complemented with microservices such as independent API based software bricks. The company will be able to connect the services of others to its bricks, and even add their own complementary bricks to the platform.
Demonetization of basic services
One of the main drivers of the third industrial revolution is the demonetization of basic needs and services, and Mt Pelerin seems to acknowledge that. The most essential service, the bank account, will be free of maintenance costs with innovative features such as dynamic, multi-IBAN numbers. Customers will also have a feature-packed debit card that will be directly connected to the company’s currency exchange marketplace, which will offer 20x cheaper exchanges than most competitors on the market today.
Mt Pelerin on Track for Swiss Banking Licences
The startup has grasped the whole complexity of financial regulation and compliance and has tackled it from its very beginning in the design of the entire project. Having worked with two of the Big Four firms and highly specialized banking lawyers, Mt Pelerin has done an enormous amount of preparation to put all the chances on its side when it will apply to a Swiss banking license. The company hopes to achieve this by the end of 2019.
The MPS Token
Mt Pelerin has issued its equity in 10,000,000 shares, which equates to 10,000,000 MPS tokens (1 MPS token equivalent to 1 share). The company is currently holding a tokenized equity sale through Dec. 15th, with the intent to fund its development until its application to relevant banking licenses. The minimum investment requirement for Swiss citizens is 50 MPS tokens (or 250 CHF), and for non-Swiss citizens, it is 200 MPS tokens (or 1000 CHF).
For more information on Mt Pelerin, their solutions, and guidelines on becoming a shareholder, check out the company’s investment webpage.