A FairX crypto-trading company was forced to close. The company said this on Twitter on July 19th, explaining that it could not provide funding for a banking license.
FairX platform closure
According to tweets, for the past 14 months, FairX has been in a difficult situation, trying to obtain the necessary financial support for obtaining a banking license from the Federal Deposit Insurance Corporation (FDIC). The firm managed a cryptocurrency platform and had the main business goal of creating a new national bank.
Interesting in the section: TRUE USD: the digital equivalent of the dollar
This bank was designed to provide a "dematerialized deposit" to cryptocurrencies that would look like a stable coin pegged to the US dollar, but with some key differences.
FairX claims that most stable coins are "doomed to failure," because the reserves that support them are not secured, and their issuers are not sufficiently responsible for the cash deposits of their customers.
To apply for an FDIC license, FairX required capital in the amount of 150 to 250 million dollars. Because of the legal features of fundraising for a bank that are different from other types of startups, it was especially difficult to interest traditional venture capitalists or crypto-investors. Therefore, the company was forced to stop working.
FairX was unable to obtain a FDIC license and was forced to close. Recall, PayPal launches a new application for fast, cheap payments worldwide. The application is called Xoom and, if successful, can become a real competitor to Ripple (XRP).
Editor: Yuliya Soroka