Industry News Litecoin Foundation is buying into a Traditional Bank

Litecoin Foundation is buying into a Traditional Bank

July 17, 2018

It can be said with great certainty that the crypto domain is one where strange and exciting news are never rare or infrequent. The same is especially underlined thanks to the fact that the same domain is often bombarded, with the guided purpose of through sheer mass reaction, with the news that is either semi-true or complete fabrication.

Thanks to this, many in the community and those around them became completely blind and deaf to any of these strange-sounding information. Things like the repeated reveals of the true creator of bitcoin led partly to this need to be super-skeptical about everything. Yet, even in the atmosphere where no one believes almost anyone else, sometimes a true piece of news can start making its rounds, only to have those in the crypto ecosystem take notice sometime after.

The recent revelation about litecoin, more precisely the Litecoin Foundation is one of those moments. The news coming from this organization is on the surface so weird that many had to check parody portals and make sure that it is factual. This piece of news provides the information that the Litecoin Foundation is buying a big share in a regular bank. This turn of events would be odd at any point in time, but is more today, when the cryptocurrency market is taking a large strain on this big crypto asset.

But, there is no doubt – the news is genuine. Here is some more in-depth information about the whole process and how should it take place in the upcoming months.

Investing in WEG Bank AG

The Litecoin Foundation purchased 9.9 percent of the WEG Bank AG. The name belongs to a small firm that houses only one office in Germany, set in the town of Ottobrunn. What is also interesting is the fact that the foundation bought these shares from their new partner, TokenPay. This company provides blockchain instruments and other adaptations of this tech on a B2B basis.

TokenPay purchased the same part of the bank back in May 2018 and stated that it planned to develop fintech solutions for the same institution. Even back then, the partnership said that the company planned to introduce a new and world-renowned company into the same process of innovation.

At the same time, it was in active negotiations with an additional bank located in Liechtenstein. Now, it is clear that the world-renowned company is the Litecoin Foundation and its head Charlie Lee announced this recently. After that, the TokenPay stated that the foundation will be present to develop and then evolve the use of blockchain to speed up the transaction process but also lower the transaction fees.

The Reactions of the Community

Expectedly, the strange news produced many reactions in the crypto community, both negative and positive. At the same time, it can be said that most of them were surprised. For a domain that is used to big news, similar to the rest of the tech community, including eSports, mobile apps, and social networks, this one still reverberates strongly.

Some were wondering if the crypto ventures were starting to get so powerful that they can directly not just influence banks, but also own them. Others have shown that the idea of merging the crypto market and traditional banks are nothing something that is new or never-been-done. Many were dismissive of the move and labeled it a publicity stunt that has little to do with either fintech or banks as much as it does with brute force promotion.

Still, not many could have guessed that a venture like the Litecoin Foundation would focus on getting a share in a traditional bank. Now, the deal is done and there no other way to present this than to say that the same organization now possesses a part of a traditional bank in the biggest market in the EU. At least on paper, this spelled out very big things to come for the bank and their crypto partners.

An Objective Look

At the same time, there were some voices in the community that were calling for a more measured look. Some pointed out that the whole point of the crypto community and its product was to offer an alternative to banking. Now, with the Litecoin Foundation building up the processes and procedures of a regular bank, the cycle seemed to come full circle.

Again, even with blockchain tech, the bank would operate in the traditional financial environment. This means under the supervision of a central bank, using traditional infrastructure and rules that go with it. For many, this was disparaging news, like many that came in the bitcoin domain regarding regulation recently.

Others were not so drastic in their assessment but tried to stay in the realm of objectivity. This means that they stated that the purchase of the part of a bank is not that signification in any sense. Instead, it was, according to them, both a chance to diversify and get a foothold in a developing domain. In any case, it did not spell out that upcoming superiority of the Litecoin Foundation in the crypto community or its downfall because of the connection to a traditional financial institution.

LTC Price Movements

Naturally, the price of the litecoin token did not ignore the news. Many believed that it would move strongly in either direction because of the purchase. But, the reality seemed to be lining itself next to the realists and did not do either of these. The price did spike to $81 on Wednesday when the news broke, but did not move further.

That still puts it far below the highs of the cryptocurrency it attained back in the big bull run of 2017. In January, the LTC price soared to over $330 and it went downwards after that, as well as most in the crypto space.

Now, the movement stayed the course and did not move anywhere further with the price being $89 at the moment of writing this. Yet, the news in its most essential form does provide something new to the crypto arena. Looking at from the long run perspective, moves like this in the past mostly signaled good things for all involved parties.

Source: CoinDesk