Singapore-based bitcoin exchange Quoine has raised $20 million from venture capitalists, building on a $2 million angel investment in December of 2014, according to dealstreetasia.com. The exchange will move its headquarters to Tokyo, while keeping its Singapore office.
Expanding investment by corporations in bitcoin marks a continuation of a 2015 trend.
Data from CB Insights cited by dealstreetasia indicated that the top five largest bitcoin and blockchain investments have totaled $131 million in 2016 to date, of which only $4 million did not come from corporations. In 2015, corporations invested a total $298 million. Funding in 2014 was $161.5 million, of which none was from corporate sources, while 2013 witnessed $54 million, none from corporate sources.
Quoine launched in 2015, tapping the Japanese potential for bitcoin and cryptocurrencies. Japan, the world’s third largest economy and the Indo-Asia-Pacific region’s second largest economy, has regulated bitcoin exchanges in order to both regulate and legitimize cryptocurrency trading.
Mario Gomez Lozada, current president and CEO of Quoine, told The Japan Times that Quoine saw Japan as the third biggest economy that no one was tapping from a bitcoin perspective.
Lozada believes the company will attract Japanese consumers based on his knowledge from working with traditional banking systems. Much of the company’s core management team has worked with UBS, HSBC, Merrill Lynch, Credit Suisse and SoftBank.
Mike Kayamori, co-founder and CEO of Quoine, said he envisions banks using the public ledger’s smart contracts to automate. He said the Euro was an excellent thesis, but its implementation was wrong. He said each country cannot control its own money flow. The global currency is bitcoin, which is driven by supply and demand, like fiat currencies.
Martin Tillier, a finance journalist and former FX trader, noted in a recent Nasdaq opinion piece that bitcoin is still in a disruptive period in a positive way. The growth in projects using blockchain-like systems is delivering reasoned coverage about bitcoin, causing more people to understand what bitcoin is and how it can be a positive force.
Kamori noted that loyalty point cards, online currency trading and mobile game tokens were all popular speculative investments in Japan. When coupled with a cultural aversion to investing in stock markets and deflation, retail investors in Japan tend to invest in forex markets.
He said Japan will be larger than China from a liquidity and volume perspective. Japan’s retail FX outsizes all other countries, he said.
Also read: Digital Currency industry in Japan awaits regulation
Quoine is adopting a business-to-business (B2B) trajectory to position itself as an “exchange for exchanges” that offers liquidity to established brokerages that will be able to leverage cryptocurrency trading possibilities for further revenue growth.
Kurt Hanson, an angel investor in Quoine, said the $20 million represents a vote of confidence in Quoine. He said he is looking forward to seeing the company build its Asian business and take bitcoin mainstream. He said Quoine will continue its “amazing growth” for the next five years, particularly in the remittance market of Asia’s developing countries.
After working on what it calls Banking 3.0, Quoine will become a virtual bank to everyone, like the Airbnb and Uber of banks, Hanson said. Bitcoin will grow at a steady pace. Convincing the average consumer it will benefit them will be the challenge.
Quoine, as part of its 3.0 strategy, will spin off some of its technologies like the loan platform and work with exiting fintech companies to provide services via mobile app by tapping into APIs, Hanson said. The goal is to offer a full banking solution that ranges from interest earning accounts, basic deposits and fund transfers (via blockchain wallet technologies) to more advanced features like investments, loans, wealth management and trading.
Quoine announced in March that it was launching Ethereum trading. The company noted users can trade ETH versus any of 10 supported fiat currencies. It noted it would make ETH/BTC available. Quoine is not licensed to operate in the U.S.
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Last modified (UTC): June 21, 2016 14:35