Debanking and Bitcoin Business Accounts in the EU | Prashanth Chandrashekar SLP782

Stephan Livera (0:02)

Hi, everyone. Welcome back to Stephan Livera Podcast. Rejoining me on the show today is Prashanth from Bringin. And I'll just make sure upfront, there is a disclosure. I'm an investor and advisor in Bringin. But yeah, with that said, Prashanth, welcome back to the show.

Prashanth Chandrashekar (0:15)

Thanks, Stephan. Thanks for having me back.

Stephan Livera (0:18)

So lots of updates. There's a bit of, you know, debanking, war on cash. These kinds of ideas are kind of out there. I know you also have Bringin for Business to chat about.

So yeah, maybe just give a quick overview on where you see things nowadays, like with Bitcoin, just broadly, before we get to Bringin.

Prashanth Chandrashekar (0:38)

Yeah, sure. So it's very interesting times, actually, especially in the EU, post-MiCA.

For me, it's almost clear how messed up trying to merge a traditional finance, which is built on a centralized systems, and Bitcoin, which is totally on different fundamental principles, like self-custody and things like that. So trying to put them together, because we have to put them together, because people have to buy Bitcoin and then they have to liquidate, or they have to spend Bitcoin. So this is a transitional phase. So with microregulations, this is very clear how every transaction, you'll have to declare yourself and all this KYC, AML frauds that comes into play. So it's, and the hacks, and the data leaks, and the privacy.

So it's a mess of times. I think the transition between the old systems and new system. This is quite evident, but it's very clear, this year at least in the EU.

Stephan Livera (1:40)

Yeah, and so the different, I think the big thing has just been this idea of, as you mentioned, with MiCA and the, I guess the scrambling of different companies to try to comply with that. And I guess you could argue it does kind of shut out smaller companies somewhat, right?

Prashanth Chandrashekar (2:00)

That's true. So the data says almost 90% of the EU crypto companies that existed before MiCA couldn't obtain the license. And I think now the number is not 90, but about only 30% have managed to get the licenses.

And all the remaining 70, and I know some companies personally have who did not manage to get the licenses to be able to operate. So, it's a, we in our report earlier, we called it the reset. So, there's a lot of things.

Stephan Livera (2:34)

And I guess there's a pros and cons to it also, because it allows you to, yes, the downside is, yeah, it's very costly, very onerous. It's a lot of work, not everybody can get approved for this. But on the other hand, once you do get approved, it allows that easy passporting around the EU. So I guess that's on the pro side that you can now access this market of hundreds of millions of people, instead of just a market in whatever country you're in.

Prashanth Chandrashekar (2:58)

That's right. That's an advantage. So once we have a license, it's much easier to operate in all the countries in EU, talk about the solutions in local languages without any issues. So the passporting is there. And this is kind of important, actually having a regulations, having a license to obtain because I'm from India. So in India, there is no licenses. So it's a great idea. So we can't operate legally obtaining a license because there's no regulation. So I guess a clear regulations and license that we can obtain as it's an advantage, definitely.

Stephan Livera (3:31)

Yeah. And I think this is the thing of expanding Bitcoin access. Now, of course, there is the, let's say, cyberpunk libertarian side of it of just, hey, just do it all yourself. But the other aspect of it is, if you want more people, you have to be able to access the Tradfire system because that's where most of the wealth is today. Now, I understand for some people that's like, they don't care about that. They just want to be able to do their cyberpunk thing. Cool. That's for them. But for those of us who believe Bitcoin is going to become the money of the world, well, we're going to need ways to make services and products that are accessible for people who are not libertarian and not cyberpunk. And so that's going to be like 99% of people, right? So I think that's probably the challenge. That's the tension, isn't it?

And I think historically, one of the challenges in the space has just been like all the AML, KYC sanctions, all this compliance stuff, and people getting their accounts shut down. And because of the laws around things like, for example, tipping off, there may be cases where they get an account shut down and their bank or financial institution or a crypto exchange is not even allowed to tell them why, because that might risk, quote, unquote, tipping off. And so that's part of the challenge that we're in today, isn't it?