Blockrise Achieves Regulatory Milestone
Blockrise, a startup focused exclusively on Bitcoin and based in the Netherlands, recently achieved a significant milestone by obtaining a regulatory license that will enable it to offer comprehensive Bitcoin financial services throughout Europe. This approval was granted by the Dutch Authority for the Financial Markets (AFM) under the recently established Markets in Crypto-Assets Regulation (MiCA), which aims to streamline crypto asset regulations across the continent. The announcement was made on Wednesday, following the license issuance on Tuesday.
New Bitcoin Services and Business Loans
With the new MiCA license in hand, Blockrise is set to introduce its suite of Bitcoin services, which includes options for custody, trading, and asset management for users across Europe. Notably, the startup is unveiling a new offering that allows business clients to take out loans backed by Bitcoin, even though the current MiCA guidelines do not yet extend to regulating cryptocurrency lending.
Blockrise will begin offering business loans starting from €20,000 (approximately $23,150), with the potential for clients to leverage their Bitcoin as collateral. CEO Jos Lazet explained,
“MiCA is the foundation that allows Blockrise to extend Bitcoin-backed loans, but we’ll initially be focusing solely on business clients to comply with regulatory standards.”
The current interest rate for these loans is set at 8%, with adjustments made on a monthly basis.
Future of MiCA and Regulatory Landscape
While MiCA is expected to fully roll out by late 2024, it primarily covers aspects of crypto issuance and trading. Critical sectors such as lending and decentralized finance are still outside its regulatory framework. Lazet remains positive about MiCA’s evolving nature, anticipating that it will expand to encompass additional areas and sectors, including lending and payments. He stated,
“Although MiCA does not yet cover everything, it is anticipated to grow and include various sectors like lending, mining, and payments as time progresses.”
Innovative Custody Model
Founded in 2017, Blockrise has developed a crypto asset management model that includes a semi-custodial wallet structure. This system differs from traditional self-custody methods; instead of a private key, users are provided with a unique Blockrise key, which is strictly for accessing their Bitcoin holdings on the platform. According to Lazet, Blockrise employs advanced hardware security modules to create secure Bitcoin wallets, making it impossible for keys to be extracted for external use. To facilitate transactions, both the user’s Blockrise key and the company’s authorization are required.
Client Asset Management
As Blockrise manages client assets totaling around €100 million (roughly $116 million), Lazet points out that measuring assets under management presents challenges due to the company’s unique custody model. This innovative approach, however, positions Blockrise as a noteworthy player in the rapidly evolving cryptocurrency landscape.
