According to the report, CEO Jeffrey Berns said he bought out Kirkwood Bank of Nevada in order to secure financial inclusion for Blockchains as well as other blockchain-based businesses:
“Purchasing the bank was basically security for me to make sure that Blockchains and myself had access to the financial system... But secondarily, it’s to create an environment where the blockchain ecosystem, the legitimate businesses out there who are trying to build projects that are going to empower the individual and better the world, that they have a bank that understands what they’re doing and isn’t fearful.”
Berns begin negotiating the sale in 2017 and reportedly signed the acquisition agreement in August 2018. The $28 million price included the purchase price of the bank for $25 million and an added $3 million for capital for investment purposes. Berns reportedly acquired the bank through a holding company unaffiliated with Blockchains. He commented:
“Only bank holding companies can own a bank, and if Blockchains owned the bank it would have to do reporting much like a bank holding company would. And my plans for Blockchains are to give a portion of the company away. I intend to turn over all the power to the users of the system. I don’t think the regulators would have ever been comfortable with that.”
The president of Kirkwood Bank of Nevada also reportedly claimed that there would not be any changes in day-to-day operations or management. However, Berns reportedly would like to issue a contract between Blockchains and Kirkwood in the future for developing blockchain-based banking solutions to launch by Q3 2020.
Berns views this potential partnership as providing a regulatory sandbox of sorts to test these blockchain solutions:
“I needed a playground [...] I needed a place to do proof of concept with regulators to show that loans can be done in such a way that if I have $1,000, I could invest 10 cents in 10,000 loans and, it would all be done on the blockchain and micro payments would be made, and there’s no funny business.”
As recently reported by Cointelegraph, the city of Busan, South Korea, is developing a stablecoin that is purportedly pegged one-to-one with the won — the national fiat currency. The city is also reportedly seeking to partner with BNK Busan Bank in implementing its project.