UK Government Awards £248k for Ethereum Prototype

NEWS
Michael del Castillo
Apr 28, 2016 at 15:47 UTC  |  Updated  Apr 29, 2016 at 13:06 UTC

The UK government has awarded £248k to a startup that is building a cross-border payments tool using Ethereum.

Founded in 2007, Innovate UK is a nondepartmental public office dedicated to fostering innovation through grants and investments.

In interview, Tramonex co-founder and CEO Amine Berraoui said his company will use the money to further develop its cross-border blockchain tool. London-based Tramonex already offers cross-border money transfers across 45 different currencies.

Berraoui told CoinDesk:

"We are quite advanced in our prototype already, it's more about looking for different approaches to handle the technology. Then to develop the commercial clients."

The award will be dispersed to Tramonex on a quarterly basis, depending on the company's progress in achieving a set of agreed-upon benchmarks.

Once complete, the prototype will be submitted to the Financial Conduct Authority – a key finance regulator in the UK – and other as-yet-undisclosed regulators for approval.

Innovate UK did not immediately respond to a request for comment.

Blockchain expansion

Tramonex, founded in 2013, is led by Berraoui, a former managing director for Deutsche Bank's foreign exchange business, and Marc Avedissian, who previously worked for Goldman Sachs.

Currently, Tramonex is in the process of applying for an e-money license like the one obtained last month by bitcoin startup Circle. Berraoui said he expects the entire process to take about four months.

Berraoui added that the company is already in talks with potential clients on applications, but declined to name specific firms.

Tramonex expects its new blockchain prototype to cut the costs of transferring "significantly", making its foreign exchange services more affordable to small and medium-sized businesses.

He also pointed to the firm's regulated status as a boon as it looks to develop blockchain solutions.

"At the moment most bitcoin and cryptocurrency companies operate outside regulation so we wanted to use our experience as a regulated company to help other companies around Europe," he said.

It takes a village

The award by the UK government follows in the footsteps of other projects focused on borderless transactions that have emerged in Europe in recent years.

Since 1994, members of the European Economic Area have allowed what is called "passporting" of one another's financial licenses for fellow EU members as well as Norway, Iceland and Liechtenstein. Last November, that infrastructure laid the foundation for Visa Europe to test its own remittance proof-of-concept for cross-border transactions using the bitcoin blockchain.

Even the £248k award to Tramonex comes as part of a larger effort. In April, UK Innovate committed to invest £561m over the next 12 months and to adopt a more focused approach to supporting UK-based companies.

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