What Crypto Really Thinks About Litecoin’s Banking Ambitions
It was news that was perhaps too strange for crypto’s typically divided reactions.
First revealed Wednesday, the Litecoin Foundation, the non-profit that develops the software that powers the sixth-largest cryptocurrency, bought a stake in a very real, non-crypto bank. The move was met with applause and skepticism, but also a stunned sense of disbelief from nearly all sides.
Was it a sign that crypto is becoming so powerful it will soon overturn the rule of banks?
Certainly that theory was well-represented in the initial reactions…
Indeed, the news had imaginations operating at full speed, with some going so far as to think that the crypto industry might be on a bank buying spree.
What the companies said
But while some were looking into a possibly far-off future, others took a more measured look.
First, there was the news itself. Specifically, the Litecoin Foundation acquired 9.9 percent in WEG Bank AG, a small firm with one office in a German town called Ottobrunn.
It wasn’t all the Litecoin Foundation’s doing either. Rather, it bought the shares directly from a new partner, TokenPay, which offers blockchain instruments for businesses. In May, TokenPay announced it had bought 9.9 percent of WEG Bank AG, at the time saying it was going to help the bank develop fintech solutions.
The press release also said TokenPay had an oral agreement to bring another, “world renowned” company to the partnership, and that it was in negotiations with another bank in Liechtenstein.
As it turned out Tuesday night, the “world renowned” partner was Litecoin Foundation, the organization’s head Charlie Lee proudly announced.
A TokenPay employee later explained that the new partnership will help the bank facilitate and speed up transactions using blockchain, at the same time reducing transaction fees.
A measured look
But some in the community weren’t quite ready to fantasize.
Wasn’t the whole point of crypto to escape the world of banks and build a new one, with no banks, no central banks, no old financial infrastructure and rules?
From this perspective, the news sounded disappointing to some.
Others thought the news was simply overhyped.
Still, others had their sights fixed a bit more firmly on the charts.
While the news sounded game changing, it didn’t cause any change in litecoin’s price dynamics (on Wednesday, after the news broke, the price spiked to $81). However, this is a far cry from the cryptocurrency’s price highs.
Litecoin has been on the downslide since January when it soared to $331, and it seemed the partnership has done little to change that direction, something commentators were quick to point out.
As the news shows, you just can’t please everyone in crypto!
Charlie Lee (right) image via CoinDesk archives
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